Companies (Winding Up) Rules, 2020: An Overview

COMPANIES (WINDING UP) RULES, 2020

AN OVERVIEW

•

PART 1

GENERAL

•

PART II

WINDING UP BY TRIBUNAL

•

PART III - DEBTS AND CLAIMS AGAINST COMPANY

•

PART IV

COSTS, ETC.

•

PART V

SUMMARY PROCEDURE FOR LIQUIDATION

•

PART VI.

–

MISCELLANEOUS

•

FORMS – WIN 1 TO WIN 95

Modes of Winding Up.

•

270.

 The provisions of Part I

shall apply to the winding up of

a company by the Tribunal

under this Act.

1. Short title, commencement and application.-

•

(1) These rules may be called the Companies (Winding

Up) Rules, 2020.

•

(2) They shall come into force on the 1 st day of April, 2020.

•

(3) These rules shall apply to winding up under of Companies

Act 2013 (18     of 2013).

2. Definitions.-

In these rules, unless the context or subject

matter otherwise requires, -

•

(a) "Act" means the Companies Act, 2013 (18 of 2013);

•

(b) "Form" means a Form annexed to these rules;

•

(c) "Registrar" means the Registrar of the National Company

Law Tribunal or National Company Law Appellate Tribunal and

includes such other officer of the Tribunal or Bench thereof to

whom the powers and functions of the Registrar are assigned;

•

(d) "Registry" means the Registry of the Tribunal or any of its

Benches or of the Appellate Tribunal,

•

(e) "Section" means section of the Act;

•

(f) words and expressions used and not defined in these rules

but defined in the Act shall have the meanings

respectively assigned to them in the Act.

—

•

Circumstances in Which Company May be Wound Up by Tribunal

271.

A company may, on a petition under section 272, be wound up by the

Tribunal,—

(a)

if the company has, by

special resolution

, resolved that the company be

wound up by the Tribunal;

(b) if the company has

acted against the interests of the sovereignty and

integrity of India

, the

security of the State

friendly relations with foreign

States, public order

decency or morality

(c) if on an application made by the Registrar or any other person authorised

by the Central Government by notification under this Act, the Tribunal is of

the opinion that the affairs of the company have been conducted in

fraudulent manner

or the company was formed for

fraudulent and unlawful

purpose

or the persons concerned in the formation or management of its

affairs have been

guilty of fraud, misfeasance or misconduct

in connection

therewith and that it is proper that the company be wound up

(d) Default in filing with the ROC its

financial statements or annual returns

for

immediately preceding

five consecutive financial years

; or

(e) if the Tribunal is of the opinion that it

is just and equitable

that the

company should be wound up."

•

Petition for Winding Up.

272.

) A petition to the Tribunal for the winding up of a company shall

be presented by—

•

) the company;

•

) any contributory or contributories;

•

) all or any of the persons specified above;

•

) the Registrar;

•

) any person authorised by the Central Government in that behalf; or

•

) in a case falling under clause (

) of

section 271

, by the Central

Government or a State Government.

•

) A contributory may present a petition even if

it holds fully paid-up

shares

, or

company has no assets

 or no surplus assets left for

distribution among the shareholders after the satisfaction of its

liabilities, and shares in respect of which he is a contributory or some of

them were either originally allotted or have been held by him, and

registered in his name, for at least

6 months during the 18 months

immediately

 before the commencement of the winding up or have

devolved on him through the death of a former holder.

•

Petition for Winding Up. Contd…

•

) The ROC shall be entitled to present a petition

for winding up under

section 271

, except on the

grounds specified in clause (

), Provided that

ROC

shall obtain the previous sanction of the

Central

Government

 to the presentation of a petition,

Provided further that

the

Central Government

 shall

not accord its sanction unless the company has

been given a reasonable opportunity of making

representations.

•

) A

petition presented by the company

 for winding

up before the Tribunal shall be admitted

only if

accompanied by a statement of affairs

in such form

and in such manner as may be prescribed.

•

) A copy of the petition made under this section

shall also be filed with the ROC and the ROC shall,

without prejudice to any other provisions, submit

his views to the Tribunal within 60 days of receipt of

such petition.

3. Petition for winding up.-

•

(1) For the purposes of sub-section (1)

of section 272, a

petition for winding

up

 of a company shall be presented

in Form

WIN 1

 or Form

WIN 2

, as

the case may be, with such variations

as the circumstances may require, and

shall be presented in triplicate.

•

(2) Every petition shall be verified by

an affidavit

made by the petitioner

or by the petitioners, where

there are more than one petitioners,

and in case the petition is presented

by a body corporate, by the

Director, Secretary or any other author

ised person thereof, and such affidavit

shall be in

Form WIN 3

•

Petition for Winding Up.

•

5. Admission of petition and directions as to advertisement.-

•

Petition shall be posted before the Tribunal for admission and fixing a date

for the hearing and for appropriate directions as to the advertisements to

be published and the persons, if any, upon whom copies of the petition

are to be served, and where the petition has been filed by a person other

than the company, the Tribunal may, if it thinks fit, direct notice to be

given to the company before giving directions as to the advertisement of

the petition. petitioner to bear all costs of the advertisement.

•

6. Copy of petition to be furnished.-

•

Every contributory of the company shall be entitled to be furnished by the

petitioner or by his authorised representative with a copy of the petition

within 24 hours of his requiring the same on payment of Rs. 5/- per page.

•

7. Advertisement of petition.-

•

Subject to any directions of the Tribunal, notice of the petition shall be

advertised not less than 14 days before the date fixed for hearing in any

daily newspaper in English and vernacular language widely circulated in

the State or Union territory in which the registered office of the company

is situated, and the advertisement shall be in

 Form WIN 6.

•

8. Application for leave to withdraw petition.-

•

(1) A petition for winding up shall not be withdrawn after presentation

without the leave of the Tribunal subject to compliance with any order of

the Tribunal, including as to costs.

•

(2) An application for leave to withdraw a petition for winding up

which has been advertised in accordance with the provisions of rule 7

shall not be heard at any time before the date fixed in the advertisement

for the hearing of the petition.

•

9. Substitution for original petitioner.-

•

(a) Where a petitioner -

•

(i) is

not entitled to present a petition

; or

•

(ii)

fails to advertise his petition

within the time prescribed by these rules or by order of Tribunal; or

•

(iii

) consents to withdraw the petition

, or to

allow it to be dismissed

or fails to appear in support of

his petition

 when it is called on in Tribunal on the day originally fixed for the hearing thereof, or any

day to which the hearing has been adjourned; or

•

(iv

) if appearing, does not apply for an order in terms of the prayer of his petition

; or,

•

(b) where in the opinion of the Tribunal there is

other sufficient cause

for an order being made

under this rule, the Tribunal may,, substitute as petitioner any other person who, in the opinion of

the Tribunal, would have a right to present a petition,

and who is desirous

of prosecuting the

petition.

•

10. Procedure on substitution.-

•

Where the Tribunal makes an order substituting a contributory as petitioner in a winding up

petition, it shall

adjourn the hearing to a date to be fixed by the Bench

and direct such amendments

of the petition as may be necessary and such contributory shall, within 7 days from the making of

the order,

amend the petition

accordingly, and file 2 legible and clean copies thereof together with

an affidavit in duplicate setting out the grounds, on which he supports the petition and the

amended petition shall be treated as the petition for the winding up of the company and shall be

deemed to have been presented on the date on which the original petition was presented.

•

11. Affidavit-in-objection.-

•

Any affidavit in objection to the petition under sub-section (1) of section 272 shall be filed within 30

days from the date of order, and a copy of the affidavit shall be served on the petitioner or

his authorised representative forthwith and copies of the affidavit shall also be given to any

contributory appearing in support of the petition who may require the same on payment of five

rupees per page within 3 working days.

•

12. Affidavit in reply.-

•

An affidavit in reply to the affidavit in objection to the petition shall be filed not less than seven days

before the day fixed for the hearing of the petition, and a copy of the affidavit in reply shall

be served on the day of the filing thereof on the person by whom the affidavit in objection was filed

or his authorised representative.

•

Powers of Tribunal.

•

273.

 (1) The Tribunal may, on receipt of a petition for winding up

under

section 272

 pass any of the following orders, namely:—

(a) dismiss it, with or without costs;

(b)make any interim order as it thinks fit;

(c) appoint a provisional liquidator of the company till the winding up order;

(d) make an order for the winding up of the company with or without costs; or

(e) any other order as it thinks fit:

•

Provided that an order under this sub-section shall be made within

90 days

from the date of presentation of the petition

•

Provided further that before appointing a provisional liquidator under clause

(c), the

Tribunal shall give notice to the company

, unless for special reasons to

be recorded in writing, the Tribunal thinks fit to dispense with such notice:

•

Provided also that the Tribunal shall not refuse to make a winding up order on

the ground only that the assets of the company have been mortgaged for an

amount equal to or in excess of those assets, or that the company has no

assets.

•

(2) Where a petition is presented on the ground that it is just and equitable

that the company should be wound up, the Tribunal may refuse to make an

order of winding up, if it is of the opinion that

some other remedy is available

to the petitioners

and that they are acting unreasonably in seeking to have the

company wound up instead of pursuing the other remedy.

•

Directions for Filing Statement of Affairs.

•

274.

 (1) Where a petition for winding up is filed before the Tribunal

by any person other than the company, the Tribunal shall, if

satisfied that a prima facie case for winding up of the company is

made out, by an order direct the company to file its objections

along with a statement of its affairs within 30 days of the order in

such form and in such manner as may be prescribed:

•

Provided that the Tribunal may allow a further period of 30 days in

a situation of contingency or special circumstances:

•

Provided further that the Tribunal may direct the petitioner to

deposit such security for costs as it may consider reasonable as a

precondition to issue directions to the company.

•

(2) A company

, which fails to file the statement of affairs

as referred

to in sub-section (1),

shall forfeit the right to oppose the petition

and such directors and officers of the company as found responsible

for such non-compliance, shall be liable for punishment under sub-

section (4).

•

(3) The directors and other officers of the company, in respect of

which an order for winding up is passed by the Tribunal under

clause (d) of sub-section (1) of

section 273,

 shall, within a period of

thirty days of such order, submit, at the cost of the company, the

books of account of the company completed and audited up to the

date of the order, to such liquidator and in the manner specified by

the Tribunal.

•

(4) If any director or officer of the company contravenes the

provisions of this section, the director or the officer of the company

who is in default shall be punishable with imprisonment for a term

which may extend to six months or with fine which shall not be less

than

Rs. 25,000/- but which may extend to Rs. 5 Lakhs

, or with

both.

•

(5) The complaint may be filed in this behalf before the Special

Court by ROC, provisional liquidator, CL or any person authorised by

the Tribunal.

•

4. Statement of affairs.-

•

The statement of affairs, as required to

be filed under sub-section (4) of

section 272 or sub-section (1) of

section 274, shall be in

Form WIN 4

and

shall contain information up to the

date which shall not be more than 30  days

prior to the date of filling the petition or

filling the objection as applicable and

the statement of affairs shall

be made in duplicate, duly verified

by an affidavit, and affidavit of

concurrence of the statement of affairs

shall be in

Form WIN 5.

•

Company Liquidators and Their

Appointments.

•

275.

 (1) For the purposes of winding up

of a company by the Tribunal, the

Tribunal at the time of the passing of the

order of winding up, shall appoint an OL

or a liquidator from the panel maintained

under sub-section (2) as the CL.

•

(2) The provisional liquidator or the CL, as

the case may, shall be appointed by the

Tribunal from amongst the

insolvency professionals registered under

the IBC, 2016;

•

(3) Where a provisional liquidator is

appointed by the Tribunal, the Tribunal

may limit and restrict his powers by the

order appointing him or it or by a

subsequent order, but otherwise he shall

have the same powers as a liquidator.

•

(4) [Omitted]

13. Applicability.-

•

Unless specified otherwise, the rules hereinafter shall apply to all

types of liquidators.

•

14. Appointment of provisional liquidator or Company Liquidator.-

•

(1) Tribunal may appoint a provisional liquidator of the company,

pending final orders on the winding up petition, and where the

company is not the applicant, notice of the application for

appointment of provisional liquidator shall be given to the company

in

Form WIN 7

and the company shall be given a reasonable

opportunity to make its representation unless the Tribunal, for

reasons to be recorded in writing, dispenses with such notice.

•

(2) The order appointing the PL shall set out the restrictions and

limitations and shall be in

Form WIN 8

, with such variations as may

be necessary.

•

(3) The order shall also state that it will be the duty of every person,

who is in possession of any property, books or papers, cash or any

other assets of the company, to surrender such property, books or

papers, cash or other assets, as the case may be, to the provisional

liquidator.

•

(4) Where an order for the appointment of provisional liquidator

or CL has been made, the Registrar shall within a period

not exceeding 7 days, send intimation to the CL or provisional

liquidator in

Form WIN 9

 and a copy of the order for the

appointment of provisional liquidator or CL shall also be sent to

the ROC together with a copy of the petition and the affidavit filed

in support thereof.

•

Company Liquidators and Their Appointments.

•

(5) The terms and conditions of appointment of a

provisional liquidator or Company Liquidator and

the fee payable to him or it shall be specified by the

Tribunal on the basis of task required to be

performed, experience, qualification of such

liquidator and size of the company.

•

(6) On appointment as provisional liquidator or

Company Liquidator, as the case may be, such

liquidator shall file a declaration within seven days

from the date of appointment in the prescribed

form disclosing conflict of interest or lack of

independence in respect of his appointment, if any,

with the Tribunal and such obligation shall continue

throughout the term of his appointment.

•

(7) While passing a winding up order, the Tribunal

may appoint a provisional liquidator, if any,

appointed under clause (c)of sub-section

(1)of

section 273,

 as the Company Liquidator for

the conduct of the proceedings for the winding up

of the company.

•

(5) The PL or the CL appointed by the Tribunal shall file a

declaration in

Form WIN 10

 disclosing conflict of interest

or lack of independence, with the Tribunal within 7 days

from the date of appointment.

•

(6) The provisional liquidator or the CL shall be appointed

by the Tribunal from amongst the insolvency professionals

registered under the IBC unless the official liquidator is

appointed.

•

15. Rules applicable to PL.-

•

The rules relating to CL shall apply to PL, subject to such

directions as the Tribunal may give in each case.

•

16. Costs, etc., of PL.-

•

All the costs, charges and expenses incurred by the PL

shall be paid out of the assets of the company and if

the company does not have sufficient assets or any assets

to pay the costs, charges and expenses, the Tribunal may

make appropriate orders in this regard.

•

21. Declaration by CL.-

•

The declaration by the CL regarding disclosing conflict of

interest or lack of independence In respect of his

appointment shall be filed In

 Form WIN 10

 with the

Tribunal.

•

Removal and Replacement of Liquidator.

•

276.

 (1) The Tribunal may, on a reasonable cause being shown and for

reasons to be recorded in writing, remove the provisional liquidator or

the Company Liquidator, as the case may be, as liquidator of the company

on any of the following grounds, namely:—

(a) misconduct

(b)fraud or misfeasance;

(c) professional incompetence or failure to exercise due care and diligence

in performance of the powers and functions;

(d) inability to act as provisional liquidator or as the case may be, Company

Liquidator;

(e) conflict of interest or lack of independence during the term of his

appointment that would justify removal.

•

(2) In the event of death, resignation or removal of the PL or CL, the

Tribunal may transfer the work assigned to him or it to another CL for

reasons to be recorded in writing.

•

(3) Where the Tribunal is of the opinion that any liquidator is responsible

for causing any loss or damage to the company due to fraud or

misfeasance or failure to exercise due care and diligence in the

performance of his or its powers and functions, the Tribunal may recover

or cause to be recovered such loss or damage from the liquidator and

pass such other orders as it may think fit.

•

(4) The Tribunal shall, before passing any order under this section,

provide a reasonable opportunity of being heard to the PL or CL.

•

Intimation to CL, PL and ROC

•

277.

 (1)Where the Tribunal makes an order for

appointment of PL or for the winding up, it shall, within 7

days, cause intimation thereof to be sent to the CL or PL

and ROC.

•

(2)On receipt of the copy of order of appointment of PL or

winding up order, the ROC shall make an endorsement to

that effect in his records relating to the company and

notify in the Official Gazette that such an order has been

made and in the case of a listed company, the Registrar

shall intimate about such appointment or order, as the

case may be, to the stock exchange or exchanges where

the securities of the company are listed.

•

(3) The winding up order shall be deemed to be a notice of

discharge to the officers, employees and workmen of the

company, except when the business of the company is

continued.

•

(4) Within 3 weeks from the date of passing of winding up

order, the CL shall make an application to the Tribunal for

constitution of

a winding up committee

to assist and

monitor the progress of liquidation proceedings by the CL

in carrying out the function as provided in sub-section (5)

and such winding up committee shall comprise of the

following persons, namely:—

•

(i) Official Liquidator;

•

(ii) nominee of secured creditors; and

•

(iii) a professional nominated by the Tribunal.

•

WINDING UP ORDER

•

17. Order to be sent to liquidator and form of order.-

•

(1) The order for winding up shall be in

Form WIN 11

 and the order for

winding-up shall be sent by the Registrar after it is signed and

sealed within 7 days from the date of receipt of the order by the Registrar,

to the CL and the ROC in

Form WIN 12

and

Form WIN 13

, along with a

copy of the petition and the affidavit filed in support thereof if not already

sent at the time of appointment of the PL.

•

(2) The CL shall cause a sealed copy of the order to be served upon the

company in accordance with the provisions of section 20, at its registered

office or if there is no registered office, at its principal or last known

principal place of business, or upon such other person or persons or in

such manner as the Tribunal may direct.

•

(3) A copy of the order made by the Tribunal shall also be filed by

the liquidator within 30 days of the receipt with the Registrar of

Companies in

 form INC-28

of the Companies (Incorporation) Rules, 2014.

•

18. Contents of winding up order.-

•

An order for winding up a company shall inter-alia contain that it will be

the duty of such of the persons as are liable to submit the books of

account of the company completed and audited upto the date of the

order, to attend on the CL at required time and place and give him all the

information, and it will be the duty of every person who is in possession of

any property, books or papers, cash or any other assets of the company,

including the benefits derived therefrom, to surrender forthwith such

property, books or papers, cash or other assets and the benefits so

derived, as the case may be, to the Company Liquidator.

•

19. Directions on making winding up order.-

•

At the time of making the winding up order, the Tribunal shall

give directions to the petitioner as to the advertisement of the order and

the persons, if any, on whom the order shall be served.

•

Intimation to Company Liquidator, Provisional Liquidator and

Registrar. – Contd….

•

(5) The CL shall be the convener of the meetings of the winding up

committee which shall assist and monitor the liquidation proceedings

in following areas of liquidation functions, namely:—

•

(i) taking over assets;

•

(ii) examination of the statement of affairs;

•

(iii) recovery of property, cash or any other assets of the company

including benefits derived therefrom;

•

(iv) review of audit reports and accounts of the company;

•

(v)sale of assets;

•

(vi) finalisation of list of creditors and contributories;

•

(vii) compromise, abandonment and settlement of claims;

•

(viii) payment of dividends, if any; and

•

(ix) any other function, as the Tribunal may direct from time to time.

•

(6) The CL shall place before the Tribunal a report along with minutes

of the meetings of the committee on monthly basis duly signed by the

members present in the meeting for consideration till the final report

for dissolution of the company is submitted before the Tribunal.

•

(7) The CL shall prepare the draft final report for consideration and

approval of the winding up committee.

•

(8) The final report so approved by the winding up committee shall be

submitted by the CL before the Tribunal for passing of a dissolution

order in respect of the company.

•

20. Advertisement of order.-

•

The order for the winding up of a company by the

Tribunal shall, within 14 days of the date of the order, be

advertised by the petitioner

in a newspaper in English

and a newspaper in vernacular language widely

circulating in the State where the registered office of the

company is situated and shall be

served by the petitioner

upon such person

, if any, and in such manner as the

Tribunal may direct, and the advertisement shall be in

Form

WIN 14

•

23. Form of proceedings after winding up order is

made.-

•

After a winding up order is made or a PL is

appointed, every subsequent proceeding in the

winding up shall bear the

original number of the

winding up petition

 besides its own distinctive

number, but against the name of the company in

the cause-title, the words

'in liquidation' or 'in

provisional liquidation

' as the case may be, shall

appear in brackets.

•

278.

 The order for the winding up of

a company shall operate in favour of

all the creditors and all

contributories of the company as if it

had been made out on the joint

petition of creditors and

contributories.

•

Stay of Suits, etc., on Winding up

Order.

•

279.

 (1) When a winding up order has

been passed or a provisional liquidator

has been appointed, no suit or other

legal proceeding shall be commenced,

or if pending at the date of the winding

up order, shall be proceeded with, by or

against the company, except with the

leave of the Tribunal and subject to

such terms as the Tribunal may impose:

•

Provided that any application to the

Tribunal seeking leave under this

section shall be disposed of by the

Tribunal within sixty days.

•

(2) Nothing in sub-section (1)shall apply

to any proceeding pending in appeal

before the Supreme Court or a High

Court.

•

APPLICATION FOR STAY OF SUITS

ETC. ON WINDING UP ORDER

•

24. Application for leave to

commence or continue suit

or proceeding.-

•

An application under sub-section

(1) of section 279 for leave of

the Tribunal to commence or

continue any suit or other legal

proceeding by or against the

company shall be made in

Form WIN 15

 upon

notice to the Company Liquidator

and the parties to the suit or

proceeding sought to

be commenced or continued.

•

Jurisdiction of Tribunal.

•

280.

 The Tribunal shall, notwithstanding anything

contained in any other law for the time being in force,

have jurisdiction to entertain, or dispose of,—

•

) any suit or proceeding by or against the company;

•

) any claim made by or against the company,

including claims by or against any of its branches in

India;

•

) any application made under section 233 (Merger

or Amalgamation of Certain Companies);

•

) any question of priorities or any other question

whatsoever, whether of law or facts, including those

relating to assets, business, actions, rights,

entitlements, privileges, benefits, duties,

responsibilities, obligations or in any matter arising

out of, or in relation to winding up of the company,

whether such suit or proceeding has been instituted,

or is instituted, or such claim or question has arisen or

arises or such application has been made or is made

or such scheme has been submitted, or is submitted,

before or after the order for the winding up of the

company is made.

•

REPORTS BY COMPANY LIQUIDATOR UNDER SECTION 281

•

25. Report by Company Liquidator.-

•

(1) The report to be submitted by the Company Liquidator under sub-

section (1) of section 281 shall be in

Form WIN 16

•

(2) It shall be the duty of promoters, directors, officers, employees and

every person who has made or concurred in making of the statement of

affairs, to attend on the Company Liquidator and answer all such

questions as may be put to him, give all such further information and

provide assistance

•

(3) The Tribunal shall, within 7 days from the receipt of such report,

 fix a

date for the consideration

thereof by the Tribunal and notify the date on

the notice board of the Tribunal and to the Company Liquidator.

•

26. Inspection of statement of affairs and report.-

•

Every creditor or contributory, by himself, or by his agent, shall be entitled

to inspect the statement of affairs and the report of the

Company Liquidator submitted under sub-rule (1) of rule 25, on payment

of

a fee of Rs. 1,000/-

and to obtain copies thereof or extracts therefrom

on payment of a

fee of Rs. 5/- per page

•

27. Consideration of report by Tribunal. -

•

The consideration of the report made by the Company Liquidator

pursuant to section 281, shall be placed before the Tribunal, and the

Company Liquidator shall personally or by authorised representative

attend the consideration of the said report and give the Tribunal

any further information or explanation with reference to the matters

contained therein which the Tribunal may require and on consideration of

the aforesaid report, the Tribunal may pass such orders and give such

directions as it may think fit.

—

(a) the nature and details of the assets of the company including

their location and value, stating separately the cash balance in

hand and in the bank, if any, and the negotiable securities, if

any, held by the company:

Provided that the valuation of the assets shall be obtained from

registered valuers for this purpose;

(b) amount of capital issued, subscribed and paid-up;

(c) the existing and contingent liabilities of the company

including names, addresses and occupations of its creditors,

stating separately the amount of secured and unsecured debts,

and in the case of secured debts, particulars of the securities

given, whether by the company or an officer thereof, their value

and the dates on which they were given;

(d) the debts due to the company and the names, addresses

and occupations of the persons from whom they are due and

the amount likely to be realised on account thereof;

(e) guarantees, if any, extended by the company;

(f) list of contributories and dues, if any, payable by them and

details of any unpaid call;

(g) details of trade marks and intellectual properties, if any,

owned by the company;

•

28. Provisional list of contributories.-

•

(1) Unless the Tribunal dispenses with the settlement of a list of

contributories, the Company Liquidator shall prepare and file in the

Tribunal not later than 21 days after the date of the winding up

order, a provisional list of contributories of the company with their

names and addresses, the number of shares or the extent of interest to be

attributed to each contributory, the amount called up and the amount paid

up in respect of such shares or interest, and distinguishing in such list

the

 several classes of contributories

•

(2) The list shall consist of every person who was a member

of the company at the commencement of the winding up or his

representative, and shall be

divided into two parts

, the first part consisting

of those who are

contributories in their own right

, and the second part, of

those who are

contributories as being representatives

of, or liable for

the debts of others, as required under sub-section (1) of section 281, and

the list shall be in

Form WIN 17

•

29. Notice to be given of date of settlement.-

•

(1) Upon the filing of the provisional list of contributories mentioned in

rule 28, the Company Liquidator

shall obtain a date from the Tribunal

for

settlement of the list of contributories and shall give notice of the date

appointed to every person included in such list, stating in such notice in

what character and for what number of shares or extent of interest such

person is included in the list, the amount called up and the amount paid up

in respect of such shares or interest, and informing such person by such

notice that if he intends to object to his being settled as a contributory in

such character and for such number of shares or interest as mentioned in

the list, he should file in Tribunal his affidavit in support of his contention

and serve a copy of the same on the Company Liquidator not less than two

days before the date fixed for the settlement, and appear before Tribunal

on the date appointed for the settlement in person or by authorised

representative and such notice shall be in

Form WIN 18

, and shall be sent

in the mode set out in section 20 so that it reaches the contributories not

less than fourteen days before the date fixed for the settlement.

•

(2) The person who posted the notice shall swear by an affidavit in

Form WIN 19

relating to the dispatch thereof, and file the same in the

Tribunal not later than two days before the date fixed for the settlement of

the list.

–

…

(h) details of subsisting contracts, joint ventures and

collaborations, if any;

(i) details of holding and subsidiary companies, if any;

(j) details of legal cases filed by or against the company; and

(k) any other information which the Tribunal may direct or the

Company Liquidator may consider necessary to include.

(2) The Company Liquidator shall include in his report the

manner in which the company was promoted or formed and

whether in his opinion any fraud has been committed by any

person in its promotion or formation or by any officer of the

company in relation to the company since the formation thereof

and any other matters which, in his opinion, it is desirable to

bring to the notice of the Tribunal.

(3) The Company Liquidator shall also make a report on the

viability of the business of the company or the steps which, in

his opinion, are necessary for maximising the value of the

assets of the company.

(4) The Company Liquidator may also, if he thinks fit, make any

further report or reports.

(5) Any person describing himself in writing to be a creditor or a

contributory of the company shall be entitled by himself or by his

agent at all reasonable times to inspect the report submitted in

accordance with this section and take copies thereof or extracts

therefrom on payment of the prescribed fees.

•

Directions of Tribunal on Report of Company Liquidator.

•

282.

 (1)The Tribunal shall, on consideration of the report of the Company

Liquidator,

fix a time limit within which the entire proceedings shall be

completed and the company be dissolved

•

Provided that the Tribunal may, if it is of the opinion, at any stage of the

proceedings, or on examination of the reports submitted to it by the Company

Liquidator and after hearing the Company Liquidator, creditors or contributories

or any other interested person, that it will not be advantageous or economical

to continue the proceedings, revise the time limit within which the entire

proceedings shall be completed and the company be dissolved.

•

(2) The Tribunal may, on examination of the reports submitted to it by the

Company Liquidator and after hearing the Company Liquidator, creditors or

contributories or any other interested person,

order sale of the company as a

going concern or its assets or part thereof

•

Provided that the Tribunal may, where it considers fit,

appoint a sale committee

comprising such creditors, promoters and officers of the company as the

Tribunal may decide to assist the Company Liquidator in sale under this sub-

section.

•

(3)Where a report is received from the Company Liquidator or the Central

Government or any person that a fraud has been committed in respect of the

company, the Tribunal shall, without prejudice to the process of winding up,

order for investigation under

section 210

, and on consideration of the report of

such investigation it may pass order and give directions under

sections

to

 or direct the Company Liquidator to file a criminal complaint against

persons who were involved in the commission of fraud.

•

(4) The Tribunal may order for taking such steps and measures, as may be

necessary, to protect, preserve or enhance the value of the assets of the

company.

•

(5)The Tribunal may pass such other order or give such other directions as it

considers fit.

•

Custody of Company's Properties.

•

283.

 (1) Where a winding up order has been made or

where a provisional liquidator has been appointed, the

Company Liquidator or the provisional liquidator, as the

case may be, shall, on the order of the Tribunal, forthwith

take into his or its custody or control all the property,

effects and actionable claims to which the company is or

appears to be entitled to and take such steps and

measures, as may be necessary, to protect and preserve

the properties of the company.

•

(2) Notwithstanding anything contained in sub-section

(1), all the property and effects of the company shall be

deemed to be in the custody of the Tribunal from the

date of the order for the winding up of the company.

•

(3) On an application by the Company Liquidator or

otherwise, the Tribunal may, at any time after the making

of a winding up order, require any contributory for the

time being on the list of contributories, and any trustee,

receiver, banker, agent, officer or other employee of the

company, to pay, deliver, surrender or transfer forthwith,

or within such time as the Tribunal directs, to the

Company Liquidator, any money, property or books and

papers in his custody or under his control to which the

company is or appears to be entitled.

•

22. Company Liquidator to take charge of assets and

books and papers of company.-

•

(1) On a winding up order being made, the

Company Liquidator shall, forthwith take into his custody

or under his control all the properties and effects,

actionable claims and the books and papers of the

company, and it shall be the duty of all persons having

custody of any of the properties, books and papers, cash

or any other assets of the company, to deliver possession

thereof to the Company Liquidator.

•

(2) Where the company, its promoters, its key managerial

personnel or any other person required to cooperate with

the liquidator

do not so cooperate

, the liquidator may

make

an application to the Tribunal

for an appropriate

order.

•

(3) The Tribunal, on receiving an application under sub-

rule (2), shall by an order, direct such promoters, key

managerial personnel or other person (including

contractual counter party, supplier, service provider

or auditor) -

•

(a) to provide the information requested by the

liquidator; and

•

(b) to comply with the instructions of the liquidator and

to cooperate with him in collection of information and

taking custody of the assets, properties and books of

accounts.

•

Promoters, Directors, etc., to Cooperate with

Company Liquidator.

•

284.

 (1) The promoters, directors, officers and

employees, who are or have been in

employment of the company or acting or

associated with the company shall extend full

cooperation to the Company Liquidator in

discharge of his functions and duties.

•

(2) Where any person, without reasonable

cause, fails to discharge his obligations under

sub-section (1), he shall be punishable with

imprisonment which may extend to 6 months

or with fine which may extend to Rs. 50,000/,

or with both.

•

Settlement of List of Contributories and Application of

Assets.

•

285.

 (1)As soon as may be after the passing of a winding

up order by the Tribunal, the Tribunal shall settle a list of

contributories, cause rectification of register of members

in all cases where rectification is required in pursuance of

this Act and shall cause the assets of the company to be

applied for the discharge of its liability:

•

Provided that where it appears to the Tribunal that it

would not be necessary to make calls on or adjust the

rights of contributories, the Tribunal may dispense with

the settlement of a list of contributories.

•

(2) In settling the list of contributories, the Tribunal shall

distinguish between those who are contributories in their

own right and those who are contributories as being

representatives of, or liable for the debts of, others.

•

(3) While settling the list of contributories, the Tribunal

shall include every person, who is or has been a member,

who shall be liable to contribute to the assets of the

company an amount sufficient for payment of the debts

and liabilities and the costs, charges and expenses of

winding up, and for the adjustment of the rights of the

contributories among themselves, subject to the

following conditions, namely:—

•

30. Settlement of list.

•

On the date appointed for the settlement of the list referred to

in rule 29,

the Tribunal shall hear any person who objects to

being settled as a contributory

or as a contributory in such

character or for such number of shares or extent of interest as

is mentioned in the said list, and after such hearing, shall finally

settle the and the aforesaid list when settled shall be certified

by the Tribunal under its seal and shall be in

Form WIN 20.

•

31. Notice of settlement to contributories.-

•

(1) Upon the receipt of the settled list of contributories, as

certified by the Tribunal in terms of rule 30, the CL shall within a

period of 7 days issue notice to every person on the list of

contributories, stating in what character and for what number

of shares or interest he has been placed on the list, what

amount has been called up and amount paid up in respect of

such shares or interest and in the notice he shall inform such

person that any application for the removal of his name from

the list or for variation of the said list, must be made to

the Tribunal within 15 days from the date of service of notice, in

Form WIN 21

•

(2) An affidavit of service by the person, who dispatched the

notice, shall be filed in Tribunal within 7 days in

Form WIN 22

•

32. Supplemental list of contributories.-

•

The Tribunal may add to the list of contributories by a

supplemental list or lists.

•

Settlement of List of Contributories and Application of

Assets. – Contd……

(a) a person who has been a member shall not be liable to

contribute if he has ceased to be a member for the

preceding one year or more before the commencement of

the winding up;

(b) a person who has been a member shall not be liable to

contribute in respect of any debt or liability of the company

contracted after he ceased to be a member;

(c) no person who has been a member shall be liable to

contribute unless it appears to the Tribunal that the present

members are unable to satisfy the contributions required to

be made by them in pursuance of this Act;

(d)in the case of a company limited by shares, no

contribution shall be required from any person, who is or

has been a member exceeding the amount, if any, unpaid

on the shares in respect of which he is liable as such

member;

(e) in the case of a company limited by guarantee, no

contribution shall be required from any person, who is or

has been a member exceeding the amount undertaken to

be contributed by him to the assets of the company in the

event of its being wound up but if the company has a share

capital, such member shall be liable to contribute to the

extent of any sum unpaid on any shares held by him as if

the company were a company limited by shares.

•

33. Variation of list.-

•

Save as provided in rule 31, the list of contributories shall not

be varied, and no person settled on the list as a contributory

shall be removed from the list, or his liability in any

way varied,

 except by order of the Tribunal

 and in accordance

with such order.

•

34. Application for rectification of list.-

•

If after the settlement of the list , the CL has reason to believe

that a contributory who had been included in the provisional

list has been improperly or by mistake excluded or omitted or

that the character in which or the number of shares or extent

of interest for which he has been included in the list as finally

settled or any other particular contained therein,

requires rectification, he may, upon notice to the

contributory concerned,

apply to the Tribunal for such

rectification

 and the Tribunal may rectify or vary the list as it

may think fit.

•

35. List of contributories consisting of past members.-

•

It shall not be necessary to settle a list of contributories

consisting of the past members of a company, unless so

ordered by the Tribunal and where an order is made for settling

a list of contributories consisting of the past members of a

company, the provisions of these rules shall apply to the

settlement of such list in the same manner as for the present

members.

•

DEBTS AND CLAIMS AGAINST COMPANY

•

100. Notice for proving debts.-

•

(1) Subject to the provisions of the Act and directions of the Tribunal, the CL in a winding

up by the Tribunal shall, within a period of 30 days from the date of order of winding up, fix a

certain day, and give a notice of 14 days thereof

•

(i) by advertisement in

Form No. WIN 43

 in one issue of a daily newspaper In the English

language and one issue of a daily newspaper In the regional language widely circulating in

the State or Union territory where the registered office is situated concerned to the creditors

of the company to prove their debts or claims and to establish any title they may have to

priority under section 326 or 327, or to be excluded from the benefit of any distribution made

before such debts or claims are proved, or, as the case may be, from objecting to such

distribution;

•

(ii) by such mode of communication as is permitted under section 20 to every person

mentioned in the statement of affairs, as a

creditor, who has not proved his debt and to every

person mentioned in the statement of affairs as a preferential creditor, whose claim to be a

preferential creditor has not been established or is not admitted

, or where there is no

statement of affairs, to the creditors as ascertained from the books of the company and, to

each person who, to the knowledge of the CL, claims to be a creditor or preferential creditor

of the company and whose claim has not been admitted, to the last known address or place

of residence of such person.

•

(2) All the rules hereinafter set out as to the admission or rejection of proofs shall apply with

necessary variations to any claim to priority as a preferential creditor.

•

101. Proof of debt.-

•

(1) In a winding up by the Tribunal, every creditor shall, subject as hereinafter provided, prove

his debt, unless the

Tribunal in any particular case directs that any creditors or class of

creditors shall be admitted without proof

•

(2) Formal proof of the debts mentioned in clause (d) of sub-section (1) of section 327 shall

not be required, unless the CL in any special case otherwise directs.

•

102. Mode of proof and verification thereof.-

•

A debt may be proved by delivering or sending to the CL by such mode as set out in

section 20, an

affidavit verifying the debt

 made by the creditor or by some person

authorised by him and if the affidavit is made by a person authorised by the

creditor, it shall state the authority and means of knowledge of the deponent and a

creditor need not attend upon the examination unless required so to do by the CL.

•

103. Contents of proof.-

•

An

affidavit proving a debt

shall contain or refer to a statement of account showing

the particulars of the debt, and shall specify the vouchers, if any, by which the

same can be substantiated and the affidavit shall state whether the creditor is a

secured creditor, or a preferential creditor, and if so, shall set out the particulars of

the security or of the preferential claims, and the affidavit shall be in

Form WIN 44

•

104. Workmen's dues.-

•

In any case where there are numerous claims for wages or any accrued

remuneration by workmen and others employed by the company, it shall be

sufficient if

one proof in

Form WIN 45

for all such claims is made either by a

foreman or some other person on behalf of all such creditors

and such proof shall

be annexed thereto as forming part thereof, setting forth the names of the

workmen and others and the amounts severally due to them in the schedule in the

said form, and any proof made in compliance with this rule shall have the same

effect as if separate proofs had been made by each of the said workmen and

others.

•

105 Production of bills of exchange and promissory notes.-

•

Where a creditor seeks to prove in respect of a bill of exchange, promissory note

or other negotiable instrument or security of a like nature on which the company is

liable, such bill of exchange, note, instrument or security shall be produced before

the CL and be marked by him before the proof is admitted.

•

106. Value of debts.-

•

The value of all debts and claims against the company shall, as far as is possible, be estimated

according to the

value thereof at the date of the appointment of the Provisional Liquidator or

the order of the winding up of the company, whichever is earlier

•

Provided that where before the presentation of the petition for winding up, a resolution has been

passed by the company for winding up, the date for estimation of debts and claims shall be the

date

of the passing of such resolution.

•

107. Discount.-

•

A creditor proving his debt shall deduct therefrom all

 trade discounts

, if any.

•

108. Interest.-

•

On any debt or certain sum payable at a certain time or otherwise, whereon interest is not reserved

or agreed for, and which is overdue at the date of the winding up order, or the resolution, as the

case may be, the creditor may prove for interest at a rate not

exceeding 6% per annum or as decided

by the Tribunal up to that date from the time when the debt or sum was payable

, if the debt or sum

is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from

the time when a demand in writing has been made, giving notice

that interest will be claimed from

the date of demand until the time of payment

•

109. Periodical payments.-

•

When any rent or other payment fa1ls due at the time referred to in rule 108, and the order or

resolution to wind up is made at any time other than one of those times mentioned in rule 108, the

persons shall

be entitled to the rent

or payments for

a proportionate part

 thereof up to the date of

winding up order or resolution accrued due from day to day:

•

Provided that where

the CL remains in occupation

of the premises demised to a company which is

being wound up, nothing in this rule shall prejudice or affect the right of the landlord of such

premises to claim payment by the company, or the liquidator, of rent during the period of the

company's or liquidator's occupation.

•

110. Proof of debt payable at future time.-

•

A creditor may prove for a

debt not payable at the date of the winding up order

, as if it were

payable presently, and may receive dividends equally with the other creditors, deducting only

thereat a

rebate of interest at the rate of 6% p.a

. computed from the date of declaration of the

dividend to the time when the debt would have become payable according to the terms on which it

was contracted.

•

111. Examination of proof.-

•

The CL shall, as soon as possible

but not later than 30 days

or within such time as may be allowed by

the Tribunal on an application by the liquidator

, examine every proof of debt lodged

with him and

the grounds of the debt and

he may call for the production of the documentary proof

if any referred

to in the affidavit of proof or require further evidence in support of the debt, and if he requires

further evidence, or requires that the creditor should attend the investigation in person, he shall fix

a day and time at which the creditor is required to attend or to produce further evidence and send a

notice to such creditor in

Form WIN 46

 by pre-paid registered post or speed post so as to reach him

not later than 7 days before the date fixed.

•

112. CL's right to call any person in connection with

investigation.-

•

The CL may call upon any person whom he may deem capable of giving information respecting the

debts to be proved in liquidation and may require such person to produce any documents in his

custody or power relating to such debts and shall tender with the call such sum as appears to the CL

sufficient to defray the traveling and other expenses of the person called for attendance and where

the person so called fails without lawful excuse to attend or produce any documents in compliance

with the call or avoids or evades service, the CL may report the same to the Tribunal and apply for

appropriate orders, and the Tribunal may pass any order as it may think fit.

•

113. Affidavit.-

•

For the purpose of his duties, in relation to

the admission of proof of debts

, where applicable, the

CL may take affidavits

and the CL may at his discretion dispense with this requirement and he may

also permit the taking of an

affidavit or undertaking in lieu of an oath.

•

114. Costs of proof.-

•

Unless otherwise ordered by the Tribunal, a creditor shall bear the costs of proving his debt.

•

115.Acceptance or rejection of proof to be communicated.-

•

As soon as possible, but not later than 14 days, from the date of conclusion of the examination

referred to in rule 111, the CL shall, in writing admit or reject the proof in whole or in part, every

decision of the liquidator accepting or rejecting a proof, either wholly or in part, shall

be communicated to the creditor concerned by means permitted under section 20 when the proof

is accepted or rejected, provided that it shall not be necessary to give notice of the admission of a

claim to a creditor who has appeared before the liquidator and the acceptance of whose claim

has been communicated to him or his agent in writing at the time of acceptance and where the

liquidator rejects a proof, wholly or in part, he shall state the grounds of the

rejection to the creditor

in

Form WIN 47

, and

notice of admission of proof

shall be in

Form WIN 48

•

116. Appeal by creditor.-

•

(1) If a creditor is dissatisfied with the decision of the CL in respect of his proof, the creditor may,

not later than 21 days

from the date of service of the notice upon him of the decision of the

liquidator,

appeal to the Tribunal against the decision

•

(2) The appeal shall be made in

Form WIN 49

, supported by an affidavit which shall set out the

grounds of such appeal, and notice of the appeal shall be given to the CL and on such appeal, the

Tribunal shall have all the powers of an appellate court under the Code of Civil Procedure, 1908 (5 of

1908).

•

117. Procedure where creditor appeals.-

•

(1) The CL shall, upon receiving notice of the appeal against a decision rejecting a proof wholly or in

part, file with the Registry such proof with the order containing the grounds of rejection.

•

(2) It shall be open to any creditor or contributory to apply to the Tribunal for leave to intervene in

the appeal, and the Tribunal may, if it thinks fit, grant the leave subject to such terms and conditions

as may be just, and where such leave has been granted, notice of the hearing of the appeal shall be

given to such creditor or contributory.

•

118. CL not to be personally liable for costs.-

•

The

CL shall in no case be personally liable for costs

in relation to an appeal from his decision

rejecting any proof wholly or in part.

•

119. Proofs and list of creditors to be filed in Tribunal.-

•

The CL shall, within 30 days from the date fixed for the submission of proofs under rule 100 or such

further time as the Tribunal may allow, file in the Tribunal a list of the creditors, in

Form WIN 50

who submitted to him proofs of their claims in pursuance of the advertisement and the notice

referred to in rule 100, mentioning the amounts of debt for which they claimed to be creditors,

distinguishing in such list the proofs admitted wholly

, the

proofs admitted or rejected in part

, and

the

proofs wholly rejected

, and the proofs, with the memorandum of admission or rejection of the

same in whole or in part, as the case may be, endorsed thereon, shall be filed in Tribunal along with

the certificate.

•

120. List of creditors not to be varied.-

•

The list of creditors filed in Tribunal shall be the list of the creditors of the company, and shall not

be added to or varied

except under the order of the Tribunal

and in accordance with such orders

and where an order is made adding to or varying the list of creditors, the CL shall amend the list in

accordance with such order.

•

121. Notice of filing list and inspection of same.-

•

Upon the filing of the list of creditors as settled by the CL, the

Registry shall notify the filing thereof

on the Tribunal's notice board and on the website of the Tribunal

, and the list of creditors as settled

and the proofs relating thereto shall be open to the inspection of

every creditor or contributory

on payment of fee of Rs. 1,000/-.

•

122. Expunging of proof.-

•

(1) If after the admission of a proof, the CL has reason to believe that the proof has been improperly

admitted or admitted by a mistake, he may immediately apply to the

Tribunal upon notice to the

creditor who made the proof, to expunge the proof or reduce its amount

, as the case may be.

•

123. Procedure on failure to prove debt within time fixed.-

•

If any creditor fails to file proof of his debt with the CL within the time

specified in the advertisement referred to in rule 100, such creditor may

apply to the Tribunal for relief within 15 days

from the time specified in

such advertisement, and the Tribunal may, thereupon, adjudicate upon the

debt or direct the liquidator to do so.

•

124. Right of creditor who has not proved debt before declaration

of

dividend.-

•

Any creditor who has not proved his debt before the declaration of any

dividend or dividends shall be entitled to be paid out of any money for the

time being in the hands of the CL available for distribution of dividend, any

dividend or dividends which such creditor may have failed to receive

before that money is applied to the payment of any future dividend or

dividends, but

he shall not be entitled to disturb the distribution of any

dividend declared before his debt was proved

by reason that he has not

participated therein.

•

125. Payment of subsequent interest.-

•

In the event of

there being a surplus after payment in full of all the claims

admitted to proof

creditors whose proofs have been admitted shall be

paid interest from the date of the winding up order or of the resolution, as

the case may be, up to the date of the declaration of the final dividend, at

a rate not exceeding 6% p.a.

or such other rate as may be decided by the

Tribunal, on the admitted amount of the claim, after adjusting against the

said amount the dividends declared as on the date of the declaration of

each dividend.

•

Obligations of Directors and Managers.

•

286.

 In the case of a limited company, any person who is or

has been a director or manager, whose liability is unlimited

under the provisions of this Act, shall, in addition to his

liability, if any, to contribute as an ordinary member, be liable

to make a further contribution as if he were at the

commencement of winding up, a member of an unlimited

company:

•

Provided that —

(a) a person who has been a director or manager shall not be

liable to make such further contribution, if he has ceased to

hold office for a year or upwards before the commencement of

the winding up;

(b) a person who has been a director or manager shall not be

liable to make such further contribution in respect of any debt

or liability of the company contracted after he ceased to hold

office;

(c) subject to the articles of the company, a director or manager

shall not be liable to make such further contribution unless the

Tribunal deems it necessary to require the contribution in order

to satisfy the debts and liabilities of the company, and the costs,

charges and expenses of the winding up.

•

Advisory Committee

•

287.

) The Tribunal may, while passing an order of

winding up of a company, direct that there shall be, an

advisory committee to advise the Company Liquidator

and to report to the Tribunal on such matters as the

Tribunal may direct.

•

) The advisory committee appointed by the Tribunal

shall consist of not more than twelve members, being

creditors and contributories of the company or such

other persons in such proportion as the Tribunal may,

keeping in view the circumstances of the company under

liquidation, direct.

•

) The Company Liquidator shall convene a meeting of

creditors and contributories, as ascertained from the

books and documents, of the company within thirty days

from the date of order of winding up for enabling the

Tribunal to determine the persons who may be members

of the advisory committee.

•

) The advisory committee shall have the right to

inspect the books of account and other documents,

assets and properties of the company under liquidation

at a reasonable time.

•

) The provisions relating to the convening of the

meetings, the procedure to be followed thereat and

other matters relating to conduct of business by the

advisory committee shall be such as may be prescribed.

•

) The meeting of advisory committee shall be chaired

by the Company Liquidator.

•

36. Meeting of creditors and contributories.-

•

The meeting of the creditors and contributories in

accordance with the provisions of subsection (3) of

section 287 to determine the persons who may be

the members of the advisory committee, shall be

convened, held and conducted in the manner hereinafter

provided in these rules for the holding and conducting of

meeting of creditors and contributories.

•

37. CL to report result of meeting.-

•

(1) Within 7 days after the meeting, the CL shall report

result to the Tribunal in

Form WIN 23

•

(2) Where the creditors and contributories have agreed

upon the constitution and composition of the AC and the

persons who are to be members thereof, an AC shall be

constituted in accordance with such decision, and the CL

shall set out in his report the names of the members of

the committee so constituted.

•

(3) If  creditors and contributories have not agreed upon

the composition of the AC and the persons who are to

be members thereof, the

CL shall apply to the Tribunal

for directions

, which shall fix a date for the consideration

of the report of the CL and the notice of the date shall

be advertised by the CL in such manner as the

Tribunal shall direct; 7 days before the date so fixed in

Form WIN 24

•

(4) On the date fixed for hearing, the Tribunal may, after

hearing the CL and any creditor or contributory who may

appear, decide as to who would be the members of the

said AC or pass such orders or give such directions in the

matter, as the Tribunal may think fit.

•

Advisory Committee – Contd….

•

38. Filling -up of vacancy in AC.-

•

(1) On a vacancy occurring in the AC, the CL shall summon

a meeting

of creditors or of contributories

, as the case may require, to

recommend for filling the vacancy and the meeting may, by

resolution, recommend for re-appointing the same, or propose

for appointing another creditor or contributory, as the case may to

fill the vacancy:

•

Provided that if the CL is of the opinion that it is unnecessary for the

vacancy to be filled,

he may apply to the Tribunal

and the Tribunal

may make an order in this regard.

•

(2) The continuing members of the AC, if

not less than two

, may act

notwithstanding any vacancy in the said committee.

•

(3) Where the creditors or contributories, as the case may be, fail to

fill the vacancy for whatever reason, the

CL shall forthwith report

such failure to the Tribunal

 and Tribunal may, by order, fill

such vacancy.

•

39. CL and members of AC dealing

with company's assets.-

•

Neither the CL nor any member of the AC shall

, while acting as such

liquidator or member of such committee in any winding up, either

directly or indirectly, by himself or through his employer, partner,

clerk, agent, servant, or relative,

become purchaser of any part of

the company's assets

except by leave of the Tribunal

 and any such

purchase made contrary to the provisions of this rule may be set

aside by the Tribunal on the application of the said liquidator or of a

creditor or contributory, as the case may be, and the Tribunal may

make such order as to costs as it may think fit.

•

Submission of Periodical Reports to

Tribunal.

•

288.

 (1)The CL shall make periodical

reports to the Tribunal and in any

case make a report at the end of

each quarter with respect to the

progress of the winding up of the

company in such form and manner

as may be prescribed.

•

(2)The Tribunal may,

on an

application by the CL

, review the

orders made by it and make such

modifications as it thinks fit.

•

76. Submission of periodical reports

to the tribunal.-

•

The CL shall make quarterly reports,

referred to in sub-section (1)

of section 288, to the Tribunal in

Form WIN 37

 with respect to the

progress of winding up of the

company.

•

Power of Tribunal on Application

for Stay of Winding Up.

•

289.

Omitted

•

ATTENDANCE AND APPEARANCE OF CREDITORS AND CONTRIBUTORIES

•

126. Attendance at proceedings.-

•

(1) Save as otherwise provided by these rules or by an order of the Tribunal, every contributory and

every creditor shall be at liberty at his own expense to attend the proceedings before the Tribunal or

before the CL and shall be entitled upon payment of the costs occasioned thereby to have notice of all

such proceedings as he shall, by request in writing addressed to the CL, desire to have notice of; but if

the Tribunal shall be of opinion that the attendance of any such person has occasioned any additional

costs which ought not to be borne by the funds of the company, it may direct such costs or a gross

sum in lieu thereof to be paid by such person and such person shall not be entitled to attend any

further proceedings until he had paid the same.

•

(2) No contributory or creditor shall be entitled to

attend any proceedings before the Tribunal

, unless

and until

he or an authorised representative on his behalf has filed an appearance with the Registry

and the Registry shall keep an

"Appearance Book

" in which all such appearances shall be entered.

•

127. Representation of creditors and contributories before Tribunal.

•

The Tribunal may, if it thinks fit, appoint from time to time anyone or more of the creditors or

contributories to represent before the Tribunal at the expense of the company, all or any class of

creditors or contributories upon any question or in relation to any proceedings before the

Tribunal, and may remove any person so appointed, if more than one person is appointed under this

rule to represent one class, and the persons so appointed, shall employ the same authorised

representative to represent them, and where they fail to agree as to the authorised representative

to be employed,

the Tribunal may nominate an authorised representative for them

•

COLLECTION AND DISTRIBUTION OF ASSETS IN WINDING UP BY TRIBUNAL

•

128. Powers of CL.-

•

The duties imposed by sub-section (1) of section 290 with regard to the collection of the assets of the

company and the application of the assets in discharge of the company's liabilities shall be discharged

by the CL subject to the control of the Tribunal

•

129. CL to be in position of receiver.-

•

For the discharge by the CL of the duties imposed by sub-section (1) of section 290, the CL shall, for

the purpose of acquiring and retaining possession of the property of the company, be in the same

position

as if he were a Receiver of the property appointed by the Tribunal

, and

the Tribunal may on

his application enforce such acquisition or retention

accordingly.

•

130. Company's property to be surrendered to CL

on requisition.-

•

Any contributory for the time being on the list of contributories, trustee, receiver, banker, agent,

officer or other employee of a company which is being wound up under order of the Tribunal, shall on

notice from the CL and within such time as he shall by notice require, pay, deliver, convey, surrender

or transfer to or into the hands of the CL any money, property or books and papers in his custody or

under his control to which the company is or appears to be entitled and where the person so required

fails to comply with the notice, the CL may apply to the Tribunal for appropriate orders and the notice

shall be in

Form WIN 51

—

(a) to carry on the business of the company so far as may be necessary for the beneficial winding up of

the company;

(b) to do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other

documents, and for that purpose, to use, when necessary, the company’s seal;

(c) to sell the immovable and movable property and actionable claims of the company by public auction

or private contract, with power to transfer such property to any person or body corporate, or to sell the

same in parcels;

(d) to sell the whole of the undertaking of the company as a going concern;

(e) to raise any money required on the security of the assets of the company;

(f) to institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in the name and

on behalf of the company;

(g) to invite and settle claim of creditors, employees or any other claimant and distribute sale proceeds in

accordance with priorities established under this Act;

(h) to inspect the records and returns of the company on the files of the Registrar or any other authority;

(i) to prove rank and claim in the insolvency of any contributory for any balance against his estate, and to

receive dividends in the insolvency, in respect of that balance, as a separate debt due from the insolvent,

and rateably with the other separate creditors;

(j) to draw, accept, make and endorse any negotiable instruments including cheque, bill of exchange,

hundi or promissory note in the name and on behalf of the company, with the same effect with respect to

the liability of the company as if such instruments had been drawn, accepted, made or endorsed by or on

behalf of the company in the course of its business;

(k) to take out, in his official name, letters of administration to any deceased contributory, and to do in his

official name any other act necessary for obtaining payment of any money due from a contributory or his

estate which cannot be conveniently done in the name of the company, and in all such cases, the money

due shall, for the purpose of enabling the Company Liquidator to take out the letters of administration or

recover the money, be deemed to be due to the Company Liquidator himself;

(l) to obtain any professional assistance from any person or appoint any professional, in discharge of his

duties, obligations and responsibilities and for protection of the assets of the company, appoint an agent

to do any business which the Company Liquidator is unable to do himself;

(m) to take all such actions, steps, or to sign, execute and verify any paper, deed, document, application,

petition, affidavit, bond or instrument as may be necessary,—

(i)

 for winding up of the company;

(ii) for distribution of assets;

(iii) in discharge of his duties and obligations and functions as Company Liquidator; and

(n) to apply to the Tribunal for such orders or directions as may be necessary for the winding up of the

company.

(2) The exercise of powers by the Company Liquidator under sub-section (1)shall be subject to the

overall control of the Tribunal.

(3) Notwithstanding the provisions of sub-section (1), the Company Liquidator shall perform such other

duties as the Tribunal may specify in this behalf.

•

Provision for Professional Assistance

to Company Liquidator.

•

291.

 (1)The Company Liquidator may,

with the sanction of the Tribunal,

appoint one or more chartered

accountants or company secretaries or

cost accountants or legal practitioners

or such other professionals on such

terms and conditions, as may be

necessary, to assist him in the

performance of his duties and

functions under this Act.

•

(2) Any person appointed under this

section shall disclose forthwith to the

Tribunal in the prescribed form any

conflict of interest or lack of

independence in respect of his

appointment.

•

77. Employment of additional or

special staff by OL.

•

Where the OL is of the opinion that the

employment of any special or

additional staff is necessary in any

liquidation

, he shall apply to the

Tribunal for sanction, and the Tribunal

may sanction such staff as it thinks fit

on such salaries and allowances

 as the

Tribunal may deem appropriate.

•

78. Declaration by professional.-

•

The professional, referred to in

section 291, appointed by the CL with

the sanction of the Tribunal shall file a

declaration in

Form WIN 38

 disclosing

any conflict of interest or lack of

independence in respect of his

appointment with the Tribunal

forthwith.

•

Exercise and Control of Company Liquidator's Powers.

•

292.

 (1) Subject to the provisions of this Act, the

Company Liquidator shall, in the administration of the

assets of the company and the distribution thereof

among its creditors, have regard to any directions which

may be given by the resolution of the creditors or

contributories at any general meeting or by the

advisory committee.

•

(2) Any directions given by the creditors or

contributories at any general meeting shall, in case of

conflict, be deemed to override any directions given by

the advisory committee.

•

(3) The Company Liquidator—

(a) may summon meetings of the creditors or

contributories, whenever he thinks fit, for the purpose

of ascertaining their wishes; and

(b) shall summon such meetings at such times, as the

creditors or contributories, as the case may be, may, by

resolution, direct, or whenever requested in writing to

do so

by not less than one-tenth in value of the

creditors or contributories

, as the case may be.

•

(4) Any person aggrieved by any act or decision of the

Company Liquidator may apply to the Tribunal, and the

Tribunal may confirm, reverse or modify the act or

decision complained of and make such further order as

it thinks just and proper in the circumstances.

•

MEETINGS OF CREDITORS AND CONTRIBUTORIES

•

44. Application of rules to meetings.-

•

Subject to any directions given by the Tribunal, rules as hereinafter set out shall apply

to meetings of creditors and contributories as may be convened in pursuance of

subsection (3) of section 287 and sub-section (3) of section 292.

•

45. Notice of meeting.-

(1) The CL shall summon meetings of creditors and

contributories by giving

not less than 14 days' notice

 by sending individually respective

creditor or contributory by

registered post or speed post or by electronic means

so as

to reach such person not less than 14 days before the date

fixed

for the meeting:

•

Provided that where the number of creditors or contributories, as the case may be,

exceeds 500

, the CL shall also give a

14 days' notice by advertisement

 in one daily

newspaper in the English language and one daily newspaper in the principal regional

language circulating in the State.

•

(2) The notice to each creditor or contributory shall be sent to their respective

addresses given in proof / Statement of Affairs / books of the Company / other address

as may be known to the person summoning the meeting, as may be applicable.

•

(3) The notices shall be in

Forms WIN 25 to 29

 as may be applicable.

•

46. Place and time of meeting.-

•

Every meeting shall be held

at such place and time as the CL considers convenient for

the majority

 of the creditors or contributories, as the case may be.

•

47. Notice of first or other meeting to officers of company.-

•

(1) The CL shall also give, to each of the officers of the company, who in his opinion

ought to attend the first or any other meeting of creditors or contributories, 14 days'

notice

in Form WIN 30

  and it shall be the duty of every such officer to attend, if so

required by the CL, and if any such officer fails to attend, the Liquidator may

report such failure to the Tribunal for necessary directions.

•

(2) The CL, if he thinks fit, may instead of requiring any of the officers of the company

to attend the meeting, require such officer to

answer any interrogatories

 or to

furnish

in writing any information

 that he may require for purposes of such meeting, and if

such officer fails to answer the interrogatories or furnish such information,

the liquidator shall report such failure to the Tribunal for directions.

•

Exercise and Control of Company

Liquidator's Powers. – Contd….

•

48. Proof of notice.-

•

An affidavit by any person who sent the notice, that such notice has been duly

sent, shall be sufficient evidence of the notice having been sent to the person to

whom the same was addressed and

the affidavit shall be filed in the Tribunal in

Form WIN 31

•

49. Costs of meeting.-

•

The cost of convening and conducting the meeting

 of the creditors or

contributories shall be met

out of the assets of the company

•

50. Chairman of meeting.-

•

The

CL or some person nominated by him shall be the Chairman

 of the meeting

and the nomination shall be in

Form WIN 32

•

51. Resolution at creditors' meeting.-

•

At a meeting of creditors, a resolution shall be deemed to be passed, when a

majority in value of the creditors present personally or by proxy

 and voting on the

resolution have voted in favour of the resolution and in a winding up by the

Tribunal, the

value of a creditor

, shall,

for the purposes of a first meeting of the

creditors

 held under section 287, be

deemed to be the value as shown in the books

of the company, or the amount mentioned in his proof

 as referred to rule 101,

whichever is less

 and for the purposes of

any other meeting, the value for which

the creditor has proved his debt or claim

•

52. Resolution of contributories' meeting.-

•

At a meeting of the contributories, a resolution shall be deemed to be passed when

majority in value of the contributories present personally or by proxy

 and voting

on the resolution have voted in favour of the resolution and the

value of

the contributories

 shall be determined according to the

number of votes to which

each contributory is entitled as a member of the company

 under the provisions of

the Act, or the articles of the company, as the case may be.

•

53. Copies of resolution to be filed.-

•

The CL shall file in the Tribunal a copy certified by him of every resolution passed at

a meeting of the creditors or contributories and

the Registry shall keep in each case

a file of such resolution

•

Exercise and Control of Company Liquidator's Powers.

– Contd….

•

54. Non-receipt of notice by creditor or contributory.-

•

Where a meeting of creditors or contributories is summoned by notice, the proceedings

and resolution at the meeting shall, unless the Tribunal otherwise orders, be valid notwithstanding

that some creditors or contributories may not have received the notice sent to them.

•

55. Adjournments.-

•

The chairman of the meeting may, with the consent of the creditors or contributories present in

the meeting, as the case may be , adjourn it from time to time, but the adjourned meeting shall be

held at the same place as the original meeting

unless in the resolution for adjournment another

place is specified or unless the Tribunal otherwise orders.

•

56. Quorum.-

•

A meeting may not act for any purpose except for adjournment thereof unless there are present or

represented thereat in the case of a creditors' meeting

at least three creditors / Contributories

entitled to vote

 or all the Creditors / contributories if the number does not exceed three.

•

57.  Procedure in absence of quorum.-

•

If,

within half an hour

 from the time appointed for the meeting, a

quorum

is not present or

represented, the meeting shall be adjourned to the same day in the following week at the same

time and place and if at such adjourned meeting, the quorum is not present,

at least two creditors

or contributories present in person shall form the quorum

 and may transact the business for which

the meeting was convened:

•

Provided that

if at the adjourned meeting also

 Quorum not present, the chairman to submit his

report to the Tribunal for directions.

•

58. When creditor can vote.-

•

In the case of a first meeting of creditors, a person shall not be entitled to vote unless

he has duly

lodged with the CL

a proof of the debt which he claims to be due to him

 and in the case of

other

meeting of creditors

, a person shall not be entitled to vote unless

he has lodged with the CL a proof

of the debt

and

such proof has been admitted wholly or in part

•

Provided

that this rule and rules 59 to 62 shall not apply to a meeting of creditors held prior to the

meeting of creditors under section 287:

•

Provided further

that this rule shall not apply to any creditors or class of creditors who by virtue of

these rules or any directions given thereunder are not required to prove their debts

•

Exercise and Control of Company

Liquidator's Powers. – Contd….

•

59. Case in which creditors may not vote.-

•

A creditor

shall not vote

 in respect of

any unliquidated or contingent debt or any

debt, value of which is not ascertained

, nor shall a creditor vote in respect of

any

debt secured by a current bill of exchange or promissory note held

 by him unless

he is willing to treat liability to him thereon of every person who is liable

thereon antecedently to the company, and against whom no order of

adjudication has been made, as a security in his hands, and to estimate the

value thereof, and for the purposes of voting, but not for purposes of dividend, to

deduct it from his proof mentioned above.

•

60. When secured creditor can vote.-

•

For the purposes of voting at a meeting, in a winding up by the Tribunal, a secured

creditor shall,

unless he surrenders his security

state in his aforesaid

proof

, the

particulars of his security, the date when it was given and the value

at

which it is assessed by a registered valuer, and

shall be entitled to vote only in

respect of the balance due to him

, if any,

after deducting the value of his security

•

61. Effect of voting

by a secured creditor.-

•

If a secured creditor votes in respect of his whole debt he shall be deemed to have

surrendered his security

, unless the Tribunal, on an application by such

creditor, is satisfied that the

omission to value the security was due to

inadvertence

•

62. Procedure when secured creditor votes without surrendering security. -

•

The

liquidator may within 15 days from the date of the meeting at which a secured

creditor voted on the basis of his valuation of the security

, require him to

give up

the security for the benefit of the creditors generally on payment of the value so

estimated by him

, and

may, if necessary, apply to the Tribunal for an order to

compel such creditor to give up the security

•

Provided that the Tribunal may, for good cause shown, permit the said

creditor to

correct his valuation before being required to give up the security, upon such terms

as to costs

 as the Tribunal may consider just.

•

63. Admission or rejection of proof for purposes of voting. -

•

The

chairman of the meeting

 shall have

power to admit or reject a proof

for

the purposes of voting, but his decision shall be

subject to appeal to the Tribunal

and if he is in doubt whether a proof shall be admitted or rejected, he shall

mark it

as objected to and allow the creditor to vote

 subject to the vote being declared

invalid in the event of the objection being sustained

•

Exercise and Control of Company

Liquidator's Powers. – Contd….

•

64. Minutes of proceedings.-

•

(1) The chairman of the meeting shall cause minutes of the proceedings at the

meeting to be drawn up and fairly

entered in the Minute Book within 30 days

and

the minutes shall be signed by him or by the chairman of the next meeting.

•

(2) A list of creditors and contributories present at every meeting shall be made

and kept in

Form WIN 33

•

65. Report to Tribunal.-

•

The CL shall, within 7 days of the conclusion of the meeting, report the result

thereof to the Tribunal in

Form No. WIN 34

•

66. Voting by proxies.-

•

A creditor / contributory may vote either in person or by proxy, and where a person

is authorised in the manner provided by section 113 to represent a body

corporate at any meeting, such person shall produce to the CL / chairman, a copy

of the

resolution so authorising him

 and such copy must be

certified true copy by a

director, manager, secretary or other officer of the company duly authorised in that

behalf, who shall certify that he is so authorised

•

67. Form of proxies.-

•

A creditor or contributory may give a general proxy or a special proxy to any

person, and a

general proxy shall

 be in

Form WIN 35

 and a

special proxy

in

Form

WIN 36

•

68. Proxies to CL or chairman of meeting.-

•

A creditor or contributory in a winding up by the Tribunal

may appoint the CL or

if

there is no such liquidator, the

chairman of the meeting

to act as his general or

special proxy

•

69. Use of proxies by deputy.-

•

Where a

CL who holds any proxies cannot attend the meeting

 for which they are

given

, he may in writing depute some person under his official control to use the

proxies on his behalf

 and in such manner as he may direct.

•

Exercise and Control of Company Liquidator's Powers.

– Contd….

•

70. Forms to be sent with notice.-

•

Forms of proxies shall be sent to the creditors and contributories with the notice

summoning the meeting and

no name shall be inserted or printed in the form

before it is sent

•

71. Proxies to be lodged.-

•

A proxy shall be lodged not later than 48 hours before the meeting at which it is to

be used, with the CL in a winding up by the Tribunal.

•

72. Holder of proxy not to vote on matter in which he is financially

interested.-

•

No person

acting either under a general or special proxy

, shall

vote in favour of any

resolution

 which would directly or indirectly place himself, his partner or employer

in a

position to receive any remuneration out of the assets of the company

otherwise than as a creditor ratably with the other creditors of the company.

•

73. Minor not to be appointed proxy.-

•

No person shall be appointed as a general or special proxy who is a minor.

•

74. Filling in proxy where creditor or contributory is blind or

incapable

•

The proxy of a creditor or a contributory who is blind or incapable of writing may

be accepted if such creditor or contributory has

attached his signature or mark

thereto in the presence of a witness who shall add to his signature his description

and address

•

Provided that

all insertions

 in the proxy shall be

in the handwriting of the witness

and such witness shall have certified at the foot of the proxy that all such insertions

have been made by him at the request and in the presence of the creditor or

contributory before he attached his signature or mark.

•

75. Proxy of person not acquainted with English. -

•

The proxy of a creditor or contributory who does not know English may be

accepted if it is executed in the manner provided in rule 74 and the

witness

certifies that it was explained to the creditor or contributory in the language

known to him

, and gives the creditor's or contributory's name in English below the

signature.

•

Books to be Kept by Company Liquidator.

•

293.

 (1)The Company Liquidator shall keep proper books in such manner, as may be

prescribed, in which he shall cause entries or minutes to be made of proceedings at meetings

and of such other matters as may be prescribed.

•

(2) Any creditor or contributory may, subject to the control of the Tribunal, inspect any such

books, personally or through his agent.

•

REGISTERS AND BOOKS OF ACCOUNT TO BE MAINTAINED BY

CL

•

79. Record book to be maintained by CL.-

•

The CL shall maintain a

record book

 for each company in which shall be entered

minutes of

all the proceedings and resolutions passed at any meeting of the creditors or contributories

or of the AC

, the

substance of all orders passed by the Tribunal

 in the liquidation

proceedings, and

all such matters other than matters of account

 as may be necessary,

to

furnish a correct view of the administration of the company's affairs

•

80. Registers and books to be maintained by CL.-

•

(1) The CL shall maintain the following books of accounts, so far as may be applicable, in

respect of the company under winding up:

•

(a). Register of Liquidations in

Form WIN 38 A

•

To ……………………………………………………………….

•

(s). Books Register in

Form WIN 38 S;

•

(t). Register of unclaimed dividends and undistributed assets, deposited into the companies

liquidation account in the Bank, in

Form WIN 38T

, and in maintaining the registers and

books mentioned above, the CL shall follow ·the instructions contained in the respective

forms provided for the said books and registers,

•

(2) The CL shall, in addition to the registers and books referred to in sub-rule (1), maintain

such other books as may be necessary

 for the proper and efficient working of his office such

as petty cash register, correspondence register, despatch register, daily register of money

orders and cheques received for accounting of transactions entered into by him in relation

to the company.

•

(3)

Where the accounts of the company are incomplete

, the CL shall,

with all convenient

speed

, as soon as the order for winding up is made,

have them completed and brought up-

to-date

•

(4) (a)

Where the CL is authorised to carry on the business of the company

 he shall keep

separate books of account in respect of such business

 and such books shall, as far as

possible, be

in conformity with the books already kept

 by the company in the course of its

business, and the CL shall incorporate in the

winding up cash book

and

 in the

company's

cash book

, the

total weekly amounts of the receipts and payments on such trading account

•

(b) The

trading account

 shall, from time to time not less than

once in every month

, be

verified by affidavit

, and the CL shall thereupon

submit such account to the AC

 (if any) or

such member thereof as may be appointed by the said committee for that purpose,

who

shall examine and certify the same

•

(5) The CL shall keep

proper vouchers

 for all payments made or expenses incurred by him,

and the

vouchers shall be serially numbered

•

Audit of Company Liquidator's Accounts.

•

294.

 (1)The Company Liquidator shall maintain proper and regular books of

account including accounts of receipts and payments made by him in such

form and manner as may be prescribed.

•

(2)The Company Liquidator shall, at such times as may be prescribed but not

less than twice in each year during his tenure of office, present to the Tribunal

an account of the receipts and payments as such liquidator in the prescribed

form in duplicate, which shall be verified by a declaration in such form and

manner as may be prescribed.

•

(3) The Tribunal shall cause the accounts to be audited in such manner as it

thinks fit, and for the purpose of the audit, the Company Liquidator shall

furnish to the Tribunal with such vouchers and information as the Tribunal may

require, and the Tribunal may, at any time, require the production of, and

inspect, any books of account kept by the Company Liquidator.

•

(4) When the accounts of the company have been audited, one copy thereof

shall be filed by the Company Liquidator with the Tribunal, and the other copy

shall be delivered to the Registrar which shall be open to inspection by any

creditor, contributory or person interested.

•

(5)Where an account referred to in sub-section (4) relates to a Government

company, the Company Liquidator shall forward a copy thereof—

(a) to the Central Government, if that Government is a member of the

Government company; or

(b) to any State Government, if that Government is a member of the

Government company; or

(c) to the Central Government and any State Government, if both the

Governments are members of the Government company.

•

(6) The Company Liquidator shall cause the accounts when audited, or a

summary thereof, to be printed, and shall send a printed copy of the accounts

or summary thereof by post to every creditor and every contributory:

•

Provided that the Tribunal may dispense with the compliance of the provisions

of this sub-section in any case it thinks fit.

•

FILING AND AUDIT OF CL'S ACCOUNT

•

91. Half-yearly accounts to be filed.-

•

For the purposes of sub-section (2) of section 294, unless otherwise ordered by the

Tribunal, the CL shall file his accounts to Tribunal twice a year and such accounts shall

be

made up to the 31st of March and 30th of September every year

, the account for the

period ending 31 st March being filed

not later than 30th of June

 following, and account

for the period ending 30th September,

not later than 31st of December

 following:

•

Provided that the

final accounts of the CL shall be filed

 as soon as the affairs of the

company have been

fully wound up

, irrespective of the period specified above:

•

Provided further that the Tribunal may permit the

CL to straight away forward

completed accounts

 of the company in liquidation in respect of relevant period

to the

auditor

 for the purpose of audit in

Form WIN 42

 requesting that the accounts may be

audited, and the

certificate of audit

 shall be submitted

to the Tribunal not later than 1

month

 from the date of receipt of the copy of the accounts as required under

subsection (3) of section 294:

•

Provided also that the accounts

need not be got audited

 where the

transaction

 during

the period is for

Rs. 10,000/- or less

•

92. Form of account.-

•

The account shall be a

statement of receipts and payments

in

Form WIN 39

 and shall be

prepared in accordance with the instructions contained in the said form and three

copies thereof shall be filed, and the account shall be verified by an

affidavit of the CL

in

Form WIN 40

 and the

final account

 shall be in

Form WIN 41

•

93. Nil account.-

•

Where the CL has not, during the period of account, received or paid any sum of money

on account of the assets of the company, he shall file an

affidavit of no receipts or

payments

 on the date on which he shall have to file his accounts for the period.

•

94. Registry to send copy of account to auditor.-

•

As soon as the accounts are filed, the

Registry shall forward to the auditor

one

copy thereof for purposes of audit with a requisition in

Form WIN 42

 requesting that

the

accounts may be audited and a certificate of audit be submitted to the Tribunal not

later than 1 month

 from the date of receipt of the copy of the account as required

under sub-section (3) of section 294:

•

Provided that the accounts need not be got audited where the total transaction during

the period is for Rs. 10,000/- or less.

•

Audit of Company Liquidator's Accounts. –

Contd….

•

FILING AND AUDIT OF CL'S ACCOUNT

•

95. Audit of CL's accounts.-

•

The accounts shall be preferably audited by

one or more Chartered

Accountants appointed by the Tribunal from out of the panel to be

maintained by the Tribunal

, the audit shall be a complete check of the

accounts of the CL and the CL shall produce before the auditor all his

books and vouchers for the purposes of the audit, and shall give the

auditor all such explanations, information and assistance as may be

required of him in respect of the accounts.

•

96. Audit certificate to be filed.-

•

After the audit of the accounts of the CL filed in Tribunal, the

auditor

shall forward to the Registry

 a certificate of audit relating to the

account with his observations and comments, if any, on the account,

together with a copy thereof and shall forward

another copy to the CL

and the

CL shall file copy of the audit certificate together with a copy

of audited accounts with the Registrar of Companies

 and the Registry

shall file the original audit certificate with the records of the Tribunal.

•

97. Audit fees.-

•

The

audit fees shall be fixed by the Tribunal

 from time to time having

regard to -the nature and complexity of the case.

•

98. Inspection of account and certificate of audit.-

•

Any creditor or contributory

 shall be entitled to inspect the accounts

and the auditor's certificate in the office of the Tribunal on payment of

fees of Rs. 100/-

 and to

obtain a copy

 thereof on payment of the

charges at the rate of Rs. 5/- per page.

•

99. Account and auditor's report to be placed before Tribunal.-

•

Upon the audit of the account, the Registry shall place the statement of

account and the auditor's certificate before the Tribunal for its

consideration and orders.

•

Payment of Debts by Contributory and Extent of Set-off.

•

295.

 (1) The Tribunal may, at any time after passing of a

winding up order, pass an order requiring any contributory

for the time being on the list of contributories to pay, in the

manner directed by the order, any money due to the

company, from him or from the estate of the person whom

he represents, exclusive of any money payable by him or

the estate by virtue of any call in pursuance of this Act.

•

(2)The Tribunal, in making an order, under sub-section (1),

may,—

(a) in the case of an unlimited company, allow to the

contributory, by way of setoff, any money due to him or to

the estate which he represents, from the company, on any

independent dealing or contract with the company, but

not any money due to him as a member of the company

in respect of any dividend or profit; and

(b) in the case of a limited company, allow to any director

or manager whose liability is unlimited, or to his estate,

such set-off.

•

(3) In the case of any company, whether limited or

unlimited, when all the creditors have been paid in full, any

money due on any account whatever to a contributory

from the company may be allowed to him by way of set-off

against any subsequent call.

•

Power of Tribunal to Make Calls.

•

296.

 The Tribunal may, at any time after the passing of a winding up order, and

either before or after it has ascertained the sufficiency of the assets of the

company,—

(a) make calls on all or any of the contributories for the time being on the list

of the contributories, to the extent of their liability, for payment of any money

which the Tribunal considers necessary to satisfy the debts and liabilities of

the company, and the costs, charges and expenses of winding up, and for the

adjustment of the rights of the contributories among themselves; and

(b) make an order for payment of any calls so made.

•

CALLS IN WINDING UP BY TRIBUNAL

•

131. Calls by CL.-

•

Subject to the provisions of subsections (2) of section 465, the Tribunal may by

order grant leave to the CL to make calls referred to in section 296.

•

132. CL to realise uncalled capital.-

•

Notwithstanding any charge or encumbrance on the uncalled capital of the

company, the CL shall be entitled to call and realise the uncalled capital of the

company and to collect the arrears, if any, due on calls made prior to the

winding up, but shall hold all moneys so realised subject to the rights, if any, of

the holder of any such charge or encumbrance.

•

133. Application for leave to make call.-

•

(1) The CL shall not make any call without obtaining the leave of the Tribunal

for the purpose.

•

(2) Within 7 days of the settlement of the list of contributories, the CL may

apply to the Tribunal for leave to make a call on the contributories and the

application shall state the proposed amount of such call and shall be in

Form

WIN 52

 which shall be supported by the affidavit of the CL which shall be in

Form WIN 53.

•

134. Notice of application.-

•

(1) Notice of an application for leave to make a call shall be served on every

contributory proposed to be included in such call, by post under certificate of

posting so as to reach such contributory, in the ordinary course of post not less

than 7 clear days before the date appointed for the hearing thereof, or if the

Tribunal so directs, notice of the application may be given by advertisement in

Form WIN 54 , in newspapers as the Tribunal may direct, not less than 7 clear

days before the date appointed for the hearing, without a separate notice to

each contributory.

•

(2) The affidavit of service relating to the dispatch of notice to

each contributory, or to the advertisement, as the case may be, shall be filed

in the Tribunal three days before the date fixed for the hearing.

•

Power of Tribunal to Make Calls. – Contd……..

•

135. Order granting leave to make call and document making call.

•

The order granting leave to make a call shall be in Form WIN 55, and

shall contain directions as to the time within which such calls shall be paid

and when an order has been made granting leave to make a call, the CL shall

file in Tribunal, document making the call in Form WIN 56 with such variations

as circumstances may require.

•

136. Service of notice of call-

•

Immediately after filing the document making the call as referred to in

rule 135, the CL shall serve by registered post or speed post or in electronic

mode, a copy of the order granting leave to make the call upon each of

the contributories included in such call together with a notice in Form WIN 57

specifying the amount or balance due from such contributory in respect of

such call and the order granting leave to make a call need not be advertised

unless the Tribunal otherwise orders for any special reason.

•

137. Order for payment of call.-

•

The CL may apply to the Tribunal for an order against any contributory or

contributories for payment of moneys due on the calls made by him and the

application shall be made in Form WIN 58 supported by an affidavit in Form

WIN 59 and notice of the application together with a copy of the affidavit shall

be served on the contributory by registered post or speed post not less than

7 days before the date fixed for the hearing of the application, and the

order for payment shall be in Form WIN 60.

•

138. Other moneys due by contributories.-

•

When any money is due to the company from a contributory or from the estate

of the person whom he represents, other than moneys due on calls

made subsequent to the winding up but including moneys due on calls made

prior to the winding up the CL may make an application to the

Tribunal supported by an affidavit for an order against such contributory for

the payment of such moneys and the notice of the application shall be given to

such contributory by registered post or speed post not less than 7 days prior to

the date fixed for the hearing of the application.

•

Adjustment of Rights of

Contributories

•

297.

 The Tribunal shall adjust the

rights of the contributories among

themselves and distribute any

surplus among the persons entitled

thereto.

•

Power to Order Costs.

•

298.

 The Tribunal may, in the event of the assets of a

company being insufficient to satisfy its liabilities, make

an order for the payment out of the assets, of the costs,

charges and expenses incurred in the winding up, in such

order of priority inter se as the Tribunal thinks just and

proper.

•

85. Where the company has no available assets.-

•

(1) Where a company has no available assets, the CL

may, with the leave of the Tribunal, incur any necessary

expenses in connection with the winding up, out of

any permanent advance

or

other fund provided by the

Central Government

, and the expenses so incurred shall

be recouped out of the assets of the company in

priority

to the debts of the company

•

Provided that

where any money has been advanced to

the CL by the petitioner / other creditor / contributory

for meeting any preliminary expenses in connection

with the winding up

, the CL may incur any

necessary

expenses out of such amount

, and the money so

advanced shall be paid out of the assets of the company

in priority to the debts of the company:

•

Provided further that if the

OL maintains any Common

Pool Fund or Establishment Fund

 under order of the

court prior to the date of the commencement of these

rules, he shall continue to use such fund for the purpose

for which the fund was originally created.

•

(2) The OL shall

reimburse the amount availed out of

the said Common Pool Fund or Establishment Fund

for

the purpose of meeting the expenditure of the company

in liquidation which does not have sufficient funds to its

credit from the amounts of the company in liquidation

on priority basis as and when any amount comes to its

credit.

•

Power to Summon Persons Suspected of Having Property of Company, etc.

•

299.

 (1)The Tribunal may, at any time after the appointment of a provisional liquidator

or the passing of a winding up order, summon before it any officer of the company or

person known or suspected to have in his possession any property or books or papers,

of the company, or known or suspected to be indebted to the company, or any person

whom the Tribunal thinks to be capable of giving information concerning the

promotion, formation, trade, dealings, property, books or papers, or affairs of the

company.

•

(2)The Tribunal may examine any officer or person so summoned on oath concerning

the matters aforesaid, either by word of mouth or on written interrogatories or on

affidavit and may, in the first case, reduce his answers to writing and require him to

sign them.

•

(3) The Tribunal may require any officer or person so summoned to produce any books

and papers relating to the company in his custody or power, but, where he claims any

lien on books or papers produced by him, the production shall be without prejudice to

such lien, and the Tribunal shall have power to determine all questions relating to that

lien.

•

(4)The Tribunal may direct the liquidator to file before it a report in respect of debt or

property of the company in possession of other persons.

•

(5)If the Tribunal finds that—

(a) a person is indebted to the company, the Tribunal may order him to pay to the

provisional liquidator or, as the case may be, the liquidator at such time and in such

manner as the Tribunal may consider just, the amount in which he is indebted, or any

part thereof, either in full discharge of the whole amount or not, as the Tribunal thinks

fit, with or without costs of the examination;

(b) a person is in possession of any property belonging to the company, the Tribunal

may order him to deliver to the provisional liquidator or, as the case may be, the

liquidator, that property or any part thereof, at such time, in such manner and on such

terms as the Tribunal may consider just.

(6) If any officer or person so summoned fails to appear before the Tribunal at the time

appointed without a reasonable cause, the Tribunal may impose an appropriate cost.

•

(7) Every order made under sub-section (5)shall be executed in the same manner as

decrees for the payment of money or for the delivery of property under the Code of

Civil Procedure, 1908.

•

(8) Any person making any payment or delivery in pursuance of an order made under

sub-section (5) shall by such payment or delivery be, unless otherwise directed by such

order, discharged from all liability whatsoever in respect of such debt or proper

•

EXAMINATION UNDER SECTIONS 299 AND 300

•

139. Application for examination under section 299.-

•

(1) An application for the examination of a person under section 299 may be made ex-parte, provided that where

the application is made by any person other than the CL, notice of the application shall be given to the CL.

•

(2) The application referred to in sub-rule (1) shall be in Form WIN 61 and where the application is by the CL, it shall

be accompanied by a statement signed by him setting forth the facts on which the application is based, and where

the application is made by a person other than the CL, the application shall be supported by an affidavit of the

applicant setting forth the matters in respect of which the examination is sought and the grounds, relied on in

support of the application.

•

140. Directions at hearing of application.-

•

Upon the hearing of the application referred to in rule 139, the Tribunal may, if satisfied that there are grounds for

making the order, make an order directing the issue of summons against the person named in the order for his

examination or for the production of documents or both, and unless the Tribunal otherwise directs, the

examination of such person shall be held in Chambers and the order shall be in Form WIN 62.

•

141. Service of summons.-

•

The summons issued in pursuance of the order of the Tribunal shall be in Form WIN 63 and shall be served, in

the mode as referred to in section 20, on the person to be examined not less than 7 days before the date fixed for

the examination, and when the summons are served in person, there shall be paid or tendered to the person

summoned along with the summons a reasonable sum for his expenses to be fixed by the Tribunal or Registry with

due regard to the scale of fees in force in the Tribunal and when the summons are served by registered post, such

sum shall be sent to such person by postal money order.

•

142. Conduct of examination.-

•

(1) The CL shall have the conduct of an examination under section 299, provided that the Tribunal may, if for any

reasons it thinks fit so to do, entrust the conduct of the examination to any contributory or creditors and where the

conduct of the examination is entrusted to any person other than the CL, the CL shall nevertheless be entitled to

be present at the examination in person or by authorised representative, and may take notes of the examination

for his own use and put such questions to the person examined as the Tribunal may allow.

•

(2) Save as provided in sub-rule (1), no person shall be entitled to take part in an examination under section 299

except the CL and his authorised representative, but any person examined shall be entitled to have the assistance

of his authorised representative, who may re-examine the witness:

•

Provided that the Tribunal may permit, if it thinks fit, any creditor or contributory to attend the examination

subject to such conditions as it may Impose.

•

(3) Notes of the examination may be permitted to be taken by the witness or any person on his behalf on his giving

an undertaking to the Tribunal that such notes shall be used only for the purpose of the re-examination of the

witness and on the conclusion of the examination, the notes shall, unless otherwise directed by the Tribunal, be

handed over to the Tribunal for destruction.

•

143. Notes of deposition.-

•

(1) The notes of the deposition of a person examined under section 299 shall be signed by such person and shall

be lodged in the office of the Registry, but the notes shall not be open to the inspection of any creditor,

contributory or other person, except the CL, nor shall a copy thereof or extract therefrom be supplied to any

person other than the CL, save upon orders of the Tribunal.

•

(2) The Tribunal may from time to time give such general or special directions as it shall think expedient as to the

custody and inspection of such notes and the furnishing of copies thereof or extracts therefrom.

•

Power to Order Examination of Promoters, Directors, etc.

•

300.

 (1) Where an order has been made for the winding up of a company by the Tribunal, and

the Company Liquidator has made a report to the Tribunal under this Act, stating that in his

opinion a fraud has been committed by any person in the promotion, formation, business or

conduct of affairs of the company since its formation, the Tribunal may, after considering the

report, direct that such person or officer shall attend before the Tribunal on a day appointed

by it for that purpose, and be examined as to the promotion or formation or the conduct of the

business of the company or as to his conduct and dealings as an officer thereof.

(2) The Company Liquidator shall take part in the examination, and for that purpose he or it

may, if specially authorised by the Tribunal in that behalf, employ such legal assistance as may

be sanctioned by the Tribunal.

(3) The person shall be examined on oath and shall answer all such questions as the Tribunal

may put, or allow to be put, to him.

•

(4) A person ordered to be examined under this section—

(a)shall, before his examination, be furnished at his own cost with a copy of the report of the

Company Liquidator; and

(b)may at his own cost employ chartered accountants or company secretaries or cost

accountants or legal practitioners entitled to appear before the Tribunal under

section 432

who shall be at liberty to put to him such questions as the Tribunal may consider just for the

purpose of enabling him to explain or qualify any answers given by him.

•

(5) If any such person applies to the Tribunal to be exculpated from any charges made or

suggested against him, it shall be the duty of the Company Liquidator to appear on the hearing

of such application and call the attention of the Tribunal to any matters which appear to the

Company Liquidator to be relevant.

•

(6) If the Tribunal, after considering any evidence given or hearing witnesses called by the

Company Liquidator, allows the application made under sub-section (5), the Tribunal may

order payment to the applicant of such costs as it may think fit.

•

(7) Notes of the examination shall be taken down in writing, and shall be read over to or by,

and signed by, the person examined, a copy be supplied to him and may thereafter be used in

evidence against him, and shall be open to inspection by any creditor or contributory at all

reasonable times.

•

(8) The Tribunal may, if it thinks fit, adjourn the examination from time to time.

•

(9) An examination under this section may, if the Tribunal so directs, be held before any person

or authority authorised by the Tribunal.

•

(10)The powers of the Tribunal under this section as to the conduct of the examination, but

not as to costs, may be exercised by the person or authority before whom the examination is

held in pursuance of sub-section (9).

•

144. Order for examination under section 300.-

•

(1) Where an order is made for the examination of any person or persons under section 300,

the examination shall be held before the Tribunal:

•

Provided the Tribunal may direct that the whole or any part of the examination of any such

person or persons be held before any person or authority as may be mentioned in the order

and where the date of the examination has not been fixed by the order, the CL shall take an

appointment from the Tribunal, or the person or authority before whom the examination is

to be held as to the date of the examination, and the order directing examination shall be in

Form WIN 64.

•

(2) The Tribunal may, if it thinks fit, either in the order for examination or by any subsequent

order, give directions as to the specific matters on which such person is to be examined.

•

145. Notice of examination.-

•

Not less than 7 clear days before the date fixed for the examination, the CL shall give

notice thereof to the creditors and contributories of the company by advertisement in Form

WIN 65 in such newspapers as the Tribunal shall direct, and shall within the same period,

serve, either personally or by registered post or by speed post, on the person or persons to

be examined, a notice in Form WIN 66 of the date and hour fixed for the examination and

the officer before whom it is to be held, together with a copy of the order directing the

examination and where the examination is adjourned, it shall not be necessary to advertise

the adjournment or serve notice thereof unless otherwise ordered by the Tribunal.

•

146. Adjournment of examination for orders of Tribunal.-

•

Where on an examination held before the person or authority appointed

by the Tribunal, such person or authority is of the opinion that the examination is being

unduly or unnecessarily protracted or, for any other sufficient cause, he is of the opinion

that the examination should be held before the Tribunal, such person or

authority may adjourn the examination of any person, or any part of the examination, to

be held before the Tribunal and submit his report to the Tribunal, and the Tribunal

may thereupon hold the examination itself or pass such orders as it may think fit.

•

147. Procedure for contumacy.-

•

(1) If a person examined before the person or authority appointed by the Tribunal refuses to

answer to the satisfaction of such the person or authority any question which he may put or

allow to be put, such the person or authority shall forthwith report such refusal

to the Tribunal and upon such report being made, the person in default shall be in

the same position and be dealt with in the same manner as if he had made default in

answering before the Tribunal.

•

(2) The report shall be in writing and shall set forth the question or questions

put and the answer or answers given, if any, by the person examined, and the person or

authority shall notify the person examined of the date when he should attend before

the Tribunal, and the report shall be in Form WIN 67 and upon receiving

the report, the Tribunal may take such action thereon as it may think fit.

•

Power to Order Examination of Promoters, Directors, etc.

 – Contd……..

•

148. Notes of examination.

•

The notes of every examination shall, after being signed as required by sub-section (7) of

section 300, form part of the records of winding up and the CL, the person examined or

contributory of the company, shall be entitled to obtain a copy thereof from the Tribunal on payment

of Rs. 5/- per page.

•

149. Application under sub-section (5) of section 300. -

•

An application under sub-section (5) of section 300 by any person ordered to be examined to

be exculpated from any charges made or suggested against him, shall be made upon notice to the CL

and to such other persons as the Tribunal may direct.

•

150. Warrant of arrest of contributory. -

•

(1) If the Tribunal is satisfied as referred to in section 301 and that notice of the date and hour fixed

for the examination was duly served on such contributory, the Tribunal may, issue without

any further notice, a warrant in

Form WIN 68

 for the arrest of the said contributory.

•

(2) Every warrant of arrest of the contributory issued under this rule shall remain in force until it is

cancelled by the Tribunal which issued it or by the Appellate Tribunal to which appeals ordinarily

lie from the decisions of such Tribunal, or until it is executed.

•

151. Prison to which contributory arrested on warrant is to be taken.

•

Where the Tribunal issues a warrant for the arrest of the contributory as referred to in section

301, the prison in which such contributory shall be detained, shall, unless the Tribunal otherwise

orders, be specified in the order of the Tribunal in the exercise of its powers under the Act, and

the warrant for keeping the said contributory in prison shall be in Form WIN 69 and the order of

releasing him on bail shall be in

Form WIN 70.

•

152. Execution of warrant of arrest outside jurisdiction of Tribunal. -

•

(1) Where a warrant has been issued by the Tribunal under these rules for the arrest of a

contributory who is or is believed to be outside the jurisdiction of the Tribunal, the Tribunal issuing

the warrant may send the warrant of arrest for execution to the District Court or, to the Court of

Small Causes at Bombay, Calcutta or Madras (if the warrant has to be executed in any of these places)

within the ordinary jurisdiction of which such contributory shall then be or be believed to be, with a

requisition in

Form WIN 71

 annexed thereto under the seal of the Tribunal requesting execution of

the warrant by the Court to which it is sent and the last mentioned Court shall seal the warrant with

its seal and shall cause the arrest to be made by its own officers or by a Court subordinate to it

and the concerned police officers shall aid and assist within their respective jurisdiction in the

execution of such warrant.

•

(2) The Court making the arrest shall send the contributory arrested in proper custody to the Tribunal

by which the warrant of arrest was originally issued, unless he furnishes the required security to

the satisfaction of the Court for his appearance before the Tribunal, in which case the Court shall

release him on such security and inform the Tribunal by which the warrant of arrest was originally

issued.

•

Arrest of Person Trying to Leave India or

Abscond.

•

301.

 At any time either before or after

passing a winding up order, if the Tribunal

is satisfied that a contributory or a person

having property, accounts or papers of the

company in his possession is about to leave

India or otherwise to abscond, or is about

to remove or conceal any of his property,

for the purpose of evading payment of calls

or of avoiding examination respecting the

affairs of the company, the Tribunal may

cause—

(a) the contributory to be detained until

such time as the Tribunal may order; and

(b) his books and papers and movable

property to be seized and safely kept until

such time as the Tribunal may order.

•

Dissolution of Company by Tribunal.

•

302.

 (1) When the affairs of a company have been

completely wound up, the CL shall make an

application to the Tribunal for dissolution of such

company.

•

(2) The Tribunal shall on an application filed by the

CL under sub-section (1) or when the Tribunal is of

the opinion that it is just and reasonable in the

circumstances of the case that an order for the

dissolution of the company should be made, make

an order that the company be dissolved from the

date of the order, and the company shall be

dissolved accordingly.

•

(3) A copy of the order shall, within 30 days from

the date thereof, be forwarded by the CL to the

Registrar who shall record in the register relating to

the company a minute of the dissolution of the

company.

•

(4) If the CL makes a default in forwarding a copy of

the order within the period specified in sub-section

(3), the CL shall be punishable with fine which may

extend to Rs. 5,000/- for every day during which

the default continues.

•

174. CL to apply for dissolution. -

•

After the affairs of the company have been fully wound up and final accounts

thereof are audited, the CL shall apply to the Tribunal within 10 days along with

audited final accounts and auditors certificate thereon for orders as to the

dissolution of the company.

•

175. Dissolution of company. -

•

Upon the hearing of the application, the Tribunal may, after hearing the CL and

any other person to whom notice may have been ordered by the Tribunal,

upon perusing the account as audited, make such orders as it may think fit as

to the dissolution of the company, the application, subject to the provisions

of the Act, of the balance in the hands of the CL or the payment thereof into

the Company Liquidation Dividend and Undistributed Assets Account, and the

disposal of the books and papers of the company and of the liquidator.

•

176. Liquidator to pay the balance into Company Liquidation

Dividend and

Undistributed Assets Account.

•

Upon an order for dissolution being made, the CL shall forthwith pay into the

Company Liquidation Dividend and Undistributed Assets Account

any unclaimed dividends payable to creditors or undistributed

assets refundable to contributories in his hands on the date of the order

of dissolution, and such other balance in his hands as he has been directed by

the Tribunal to deposit into the Company Liquidation Dividend

and Undistributed Assets Account and every order of dissolution shall

direct that the CL shall forward a certified copy of the order to the Registrar of

Companies not later than 7 days from the date of the order, and along with the

copy of the order shall be filed with the Registrar of Companies, a statement

signed by the CL that the directions of the Tribunal regarding the application of

the balance as per his final account have been duly complied with.

•

177. Conclusion of winding

up. -

•

The winding up of a company shall, for purposes of section 302, be deemed to

be concluded at the date on which the order dissolving the company has been

reported by the CL to the ROC unless any fund or assets of the company

remaining unclaimed or undistributed in the hands or under the control of the

CL, have been distributed, or paid into the Company Liquidation Dividend and

Undistributed Assets Account as provided in section 352.

•

Appeals from Orders Made Before

Commencement of Act.

•

303.

 Nothing in this Chapter shall

affect the operation or enforcement

of any order made by any Court in

any proceedings for the winding up

of a company immediately before

the commencement of this Act and

an appeal against such order shall

be filed before such authority

competent to hear such appeals

before such commencement.

—

•

Debts of all Descriptions to be Admitted

to Proof.

•

324.

 In every winding up (subject, in the

case of insolvent companies, to the

application in accordance with the

provisions of this Act or of the law of

insolvency), all debts payable on a

contingency, and all claims against the

company, present or future, certain or

contingent, ascertained or sounding only in

damages, shall be admissible to proof

against the company, a just estimate being

made, so far as possible, of the value of

such debts or claims as may be subject to

any contingency, or may sound only in

damages, or for some other reason may

not bear a certain value.

•

Overriding Preferential Payments.

•

326.

) In the winding up of a company under this Act, the following

debts shall be paid in priority to all other debts:—

•

) workmen's dues

; and

•

where a secured creditor has realised a secured asset

, so much of the debts

due to such secured creditor as could not be realised by him or the amount of

the workmen's portion in his security (if payable under the law), whichever is

less,

pari passu

with the workmen's dues:

•

Provided that in case of the winding up of a company, the sums referred to

in sub-clauses (

) and (

ii

) of clause (

) of the

Explanation,

which are payable for

a period of two years preceding the winding up order or such other period as

may be prescribed, shall be paid in priority to all other debts (including debts

due to secured creditors), within a period of 30 days of sale of assets and shall

be subject to such charge over the security of secured creditors as may be

prescribed.

•

) The debts payable under the proviso to sub-section (

) shall be paid in full

before any payment is made to secured creditors and thereafter debts payable

under that subsection shall be paid in full, unless the assets are insufficient to

meet them, in which case they shall abate in equal proportions.

•

Explanation

.—For the purposes of this section, and section 327—

•

) "workmen'', in relation to a company, means the employees of the

company, being workmen within the meaning of clause (

) of section 2 of the

Industrial Disputes Act, 1947 (14 of 1947);

•

Overriding Preferential Payments. – Contd…….

•

) "workmen's dues'', in relation to a company, means the aggregate of the following sums due

from the company to its workmen, namely:—

•

) all wages or salary including wages payable for time or piece work and salary earned wholly

or in part by way of commission of any workman in respect of services rendered to the company

and any compensation payable to any workman under any of the provisions of the Industrial

Disputes Act, 1947 (14 of 1947);

•

ii

) all accrued holiday remuneration becoming payable to any workman or, in the case of his

death, to any other person in his right on the termination of his employment before or by the

effect of the winding up order or resolution;

•

iii

) unless the company is being wound up voluntarily merely for the purposes of reconstruction

or amalgamation with another company or unless the company has, at the commencement of

the winding up, under such a contract with insurers as is mentioned in section 14 of the

Workmen's Compensation Act, 1923 (19 of 1923), rights capable of being transferred to and

vested in the workmen, all amount due in respect of any compensation or liability for

compensation under the said Act in respect of the death or disablement of any workman of the

company;

•

iv

) all sums due to any workman from the provident fund, the pension fund, the gratuity fund

or any other fund for the welfare of the workmen, maintained by the company;

•

) "workmen's portion'', in relation to the security of any secured creditor of a company, means

the amount which bears to the value of the security the same proportion as the amount of the

workmen's dues bears to the aggregate of the amount of workmen's dues and the amount of

the debts due to the secured creditors.

•

Illustration

•

The value of the security of a secured creditor of a company is Rs. 1,00,000. The total amount of

the workmen's dues is Rs. 1,00,000. The amount of the debts due from the company to its

secured creditors is Rs.3,00,000. The aggregate of the amount of workmen's dues and the

amount of debts due to secured creditors is Rs. 4,00,000. The workmen's portion of the security

is, therefore, one-fourth of the value of the security, that is Rs. 25,000.

•

Preferential Payments.

•

327.

 (1) In a winding up, subject to the provisions of

section 326,

 there shall be paid in priority to

all other debts,—

(a) all revenues, taxes, cesses and rates due from the company to Government at the relevant

date, and having become due and payable within the 12 months immediately before that date;

(b)

all wages or salary

 including wages payable for time or piece work and salary earned wholly or

in part by way of commission of any employee in respect of services rendered and due for a

period not exceeding four months within the twelve months immediately before the relevant date

(c)

all accrued holiday remuneration becoming payable to any employee

, or in the case of his

death, to any other person claiming under him, on the termination of his employment before, or

by the winding up order, or, as the case may be, the dissolution of the company;

(d) unless the company is being wound up voluntarily merely for the purposes of reconstruction or

amalgamation with another company, all amount due in respect of contributions payable during

the period of twelve months immediately before the relevant date by the company as the

employer of persons under the Employees’ State Insurance Act, 1948 or any other law;

(e) unless the company has, at the commencement of winding up, under such a contract with any

insurer as is mentioned in section 14 of

the Workmen’s Compensation Act, 1923

, rights capable of

being transferred to and vested in the workmen, all amount due in respect of any compensation

or liability for compensation under the said Act in respect of the death or disablement of any

employee of the company:

•

Provided that where any

compensation

 under the said Act is a weekly payment, the amount

payable under this clause shall be taken to be the amount of the lump sum for which such weekly

payment could, if redeemable, be redeemed, if the employer has made an application under that

Act;

(f) all sums due to any employee from the

provident fund

, the pension fund, the gratuity fund or

any other fund for the welfare of the employees, maintained by the company; and

(g) the expenses of any investigation held in pursuance of

sections 213

and

216,

 in so far as they

are payable by the company.

•

(2) Where any payment has been made to any employee of a company on account of wages or

salary or accrued holiday remuneration, himself or, in the case of his death, to any other person

claiming through him, out of money advanced by some person for that purpose, the person by

whom the money was advanced shall, have a right of priority in respect of the money so advanced

and paid-up to the amount by which the sum in respect of which the employee or other person in

his right would have been entitled to priority in the winding up has been reduced by reason of the

payment having been made.

•

Preferential Payments. – Contd……..

•

(3) The debts enumerated in this section shall—

(a) rank equally among themselves and be paid in full, unless the assets are insufficient to meet

them, in which case they shall abate in equal proportions; and

(b) so far as the assets of the company available for payment to general creditors are insufficient

to meet them, have priority over the claims of holders of debentures under any floating charge

created by the company, and be paid accordingly out of any property comprised in or subject to

that charge.

•

(4) Subject to the retention of such sums as may be necessary for the costs and expenses of the

winding up, the debts under this section shall be discharged forthwith so far as the assets are

sufficient to meet them, and in the case of the debts to which priority is given under clause (d) of

sub-section (1), formal proof thereof shall not be required except in so far as may be otherwise

prescribed.

•

(5) In the event of a landlord or other person distraining or having distrained on any goods or

effects of the company within three months immediately before the date of a winding up order,

the debts to which priority is given under this section shall be a first charge on the goods or

effects so distrained on or the proceeds of the sale thereof:

•

Provided that, in respect of any money paid under any such charge, the landlord or other person

shall have the same rights of priority as the person to whom the payment is made.

•

(6) Any remuneration in respect of a period of holiday or of absence from work on medical

grounds through sickness or other good cause shall be deemed to be wages in respect of services

rendered to the company during that period.

•

) Sections 326 and 327 shall not be applicable in the event of liquidation under the Insolvency

and Bankruptcy Code, 2016.";

•

Explanation.—For the purposes of this section,—

(a) the expression “accrued holiday remuneration” includes, in relation to any person, all sums

which, by virtue either of his contract of employment or of any enactment including any order

made or direction given thereunder, are payable on account of the remuneration which would, in

the ordinary course, have become payable to him in respect of a period of holiday, had his

employment with the company continued until he became entitled to be allowed the holiday;

(b) the expression “employee” does not include a workman; and

) the expression "relevant date" means in the case of a company being wound up by the

Tribunal, the date of appointment or first appointment of a provisional liquidator, or if no such

appointment was made, the date of the winding up order, unless, in either case, the company had

commenced to be wound up voluntarily before that date under the Insolvency and

Bankruptcy Code, 2016;"

•

Fraudulent Preference.

•

328.

 (1) Where a company has given preference to

a person who is one of the

creditors of the

company or a surety or guarantor for any of the

debts or other liabilities of the company

, and the

company does anything or suffers anything done

which has the effect of putting that person into a

position which, in the event of the company going

into liquidation, will be better than the position he

would have been in if that thing had not been done

prior to 6 months of making winding up application

the Tribunal, if satisfied that, such transaction is a

fraudulent preference may order as it may think fit

for

restoring the position

to what it would have

been if the company had not given that preference.

•

(2) If the Tribunal is satisfied that there is a

preference transfer of property, movable or

immovable, or any delivery of goods, payment,

execution made, taken or done by or against a

company

within 6 months before making winding

up application

, the Tribunal may order as it may

think fit and may declare such transaction

invalid

and restore the position

•

Transfers Not in Good Faith to be Void.

•

. Any transfer of property, movable or

immovable, or any delivery of goods,

made by a company, not being a transfer

or delivery made in the ordinary course of

its business or in favour of a purchaser or

encumbrancer in good faith and for

valuable consideration, if made

within a

period of one year before the

presentation of a petition

for winding up

by the Tribunal under this Act shall be

void

against the CL

."

•

Certain Transfers to be Void.

•

330.

 Any transfer or assignment by a

company of all its properties or assets to

trustees for the benefit of all its creditors

shall be void.

•

Liabilities and Rights of Certain Persons Fraudulently Preferred.

•

331.

 (1)Where a company is being wound up and anything made,

taken or done after the commencement of this Act is invalid

under

section 328

 as a fraudulent preference of a person interested in

property mortgaged or charged to secure the company’s debt, then,

without prejudice to any rights or liabilities arising, apart from this

provision, the person preferred shall be subject to the same liabilities,

and shall have the same rights, as if he had undertaken to be

personally liable as a surety for the debt, to the extent of the

mortgage or charge on the property or the value of his interest,

whichever is less.

•

(2) The value of the interest of the person preferred under sub-

section (1) shall be determined as at the date of the transaction

constituting the fraudulent preference, as if the interest were free of

all encumbrances other than those to which the mortgage or charge

for the debt of the company was then subject.

•

(3) On an application made to the Tribunal with respect to any

payment on the ground that the payment was a fraudulent

preference of a surety or guarantor, the Tribunal shall have

jurisdiction to determine any questions with respect to the payment

arising between the person to whom the payment was made and the

surety or guarantor and to grant relief in respect thereof,

notwithstanding that it is not necessary so to do for the purposes of

the winding up, and for that purpose, may give leave to bring in the

surety or guarantor as a third party as in the case of a suit for the

recovery of the sum paid.

•

(4) The provisions of sub-section (3) shall apply mutatis mutandis in

relation to transactions other than payment of money.

•

Effect of Floating Charge.

•

332.

 Where a company is being wound up, a

floating charge on the undertaking or

property of the company created within the

twelve months immediately preceding the

commencement of the winding up, shall,

unless it is proved that the company

immediately after the creation of the charge

was solvent, be invalid, except for the amount

of any cash paid to the company at the time

of, or subsequent to the creation of, and in

consideration for, the charge, together with

interest on that amount at the rate of five per

cent. per annum or such other rate as may be

notified by the Central Government in this

behalf.

•

Disclaimer of Onerous Property.

•

333.

 (1) Where any part of the property of a company which is being wound up

consists of—

(a) land of any tenure, burdened with onerous covenants;

(b)shares or stocks in companies;

(c) any other property which is not saleable or is not readily saleable by reason of the

possessor thereof being bound either to the performance of any onerous act or to

the payment of any sum of money; or

(d) unprofitable contracts,

•

the Company Liquidator may, notwithstanding that he has endeavoured to sell or has

taken possession of the property or exercised any act of ownership in relation thereto

or done anything in pursuance of the contract, with the leave of the Tribunal and

subject to the provisions of this section, by writing signed by him, at any time within

twelve months after the commencement of the winding up or such extended period

as may be allowed by the Tribunal, disclaim the property:

•

Provided that where the Company Liquidator had not become aware of the existence

of any such property within one month from the commencement of the winding up,

the power of disclaiming the property may be exercised at any time within twelve

months after he has become aware thereof or such extended period as may be

allowed by the Tribunal.

•

(2) The disclaimer shall operate to determine, as from the date of disclaimer, the

rights, interest and liabilities of the company in or in respect of the property

disclaimed, but shall not, except so far as is necessary for the purpose of releasing the

company and the property of the company from liability, affect the rights, interest or

liabilities of any other person.

•

(3) The Tribunal, before or on granting leave to disclaim, may require such notices to

be given to persons interested, and impose such terms as a condition of granting

leave, and make such other order in the matter as the Tribunal considers just and

proper.

•

(4) The Company Liquidator shall not be entitled to disclaim any property in any case

where an application in writing has been made to him by any person interested in the

property requiring him to decide whether he will or will not disclaim and the Company

Liquidator has not, within a period of twenty-eight days after the receipt of the

application or such extended period as may be allowed by the Tribunal, give notice to

the applicant that he intends to apply to the Tribunal for leave to disclaim, and in case

the property is under a contract, if the Company Liquidator after such an application

as aforesaid does not within the said period or extended period disclaim the contract,

he shall be deemed to have adopted it.

•

DISCLAIMER

•

156. Application for disclaimer. -

•

(1) An application for leave to disclaim any part of the property of a company pursuant

to sub-section (1) of section 333 shall be made by

an application supported by an

affidavit

 setting out the full facts relating to the property, the parties interested, the

nature of their interests, and stating whether the company is solvent and whether

any notice has been served on the liquidator by any person referred to in sub-section

(4) of the said section

requiring him to elect whether or not he will disclaim

•

(2) The notice and application referred to in sub-rule (1) shall be in

Forms WIN 76

to

82 with such variations as may be necessary.

•

157. Preliminary hearing of application. -

•

The application referred to in rule 156 shall be posted before the Tribunal ex-parte in

the first instance for directions as to the persons on whom notice of the application

should be served, and the Tribunal shall thereupon fix a date for the hearing of the

application and give such directions as may be necessary as to the persons on whom

notice of the application should be served.

•

158. Claimant to furnish statement of his interest.

•

Where a person claims to be interested in any part of the property of

the company which the CL wishes to disclaim, such person shall, if so required by

the liquidator, furnish a statement of the interest claimed by him.

•

159. Service of notice. -

•

Notice of the date fixed for the hearing of the application referred to in rule 156 shall

be in

Form WIN 83

 and shall be served not less than 7 days before the date fixed for

the hearing, together with a copy of the application and of the affidavit filed in

support thereof, and the notice shall require that any affidavit-in-opposition to

the application shall be filed in Tribunal and a copy thereof served on the CL not later

than two days before the date fixed for the hearing.

•

160. Order granting leave to disclaim.

•

On the hearing of the application referred to in rule 156, the

Tribunal may after

hearing the CL and such parties

as may appear in response to the notices issued, and

such other persons appearing and interested as the Tribunal may think fit to hear,

grant leave to the liquidator and to disclaim on such terms and conditions if any, as to

the Tribunal may deem just and the order granting leave to disclaim shall be

in Form

WIN 84

•

Disclaimer of Onerous Property. – Contd………

•

(5) The Tribunal may, on the application of any person who is, as against the Company

Liquidator, entitled to the benefit or subject to the burden of a contract made with the

company, make an order rescinding the contract on such terms as to payment by or to

either party of damages for the non-performance of the contract, or otherwise as the

Tribunal considers just and proper, and any damages payable under the order to any

such person may be proved by him as a debt in the winding up.

•

(6) The Tribunal may, on an application by any person who either claims any interest in

any disclaimed property or is under any liability not discharged under this Act in

respect of any disclaimed property, and after hearing any such persons as it thinks fit,

make an order for the vesting of the property in, or the delivery of the property to, any

person entitled thereto or to whom it may seem just that the property should be

delivered by way of compensation for such liability as aforesaid, or a trustee for him,

and on such terms as the Tribunal considers just and proper, and on any such vesting

order being made, the property comprised therein shall vest accordingly in the person

named therein in that behalf without any conveyance or assignment for the purpose:

•

Provided that where the property disclaimed is of a leasehold nature, the Tribunal

shall not make a vesting order in favour of any person claiming under the company,

whether as under-lessee or as mortgagee or holder of a charge by way of demise,

except upon the terms of making that person—

(a) subject to the same liabilities and obligations as those to which the company was

subject under the lease in respect of the property at the commencement of the

winding up; or

(b) if the Tribunal thinks fit, subject only to the same liabilities and obligations as if

the lease had been assigned to that person at that date,

•

and in either event as if the lease had comprised only the property comprised in the

vesting order, and any mortgagee or under-lessee declining to accept a vesting order

upon such terms shall be excluded from all interest in, and security upon the property,

and, if there is no person claiming under the company who is willing to accept an

order upon such terms, the Tribunal shall have power to vest the estate and interest of

the company in the property in any person liable, either personally or in a

representative character, and either alone or jointly with the company, to perform the

covenants of the lessee in the lease, free and discharged from all estates,

encumbrances and interests created therein by the company.

•

(7) Any person affected by the operation of a disclaimer under this section shall be

deemed to be a creditor of the company to the amount of the compensation or

damages payable in respect of such effect, and may accordingly prove the amount as a

debt in the winding up.

•

DISCLAIMER

•

161. Disclaimer to be filed in Tribunal.

•

Every disclaimer shall be filed in Tribunal by the CL and shall not be

operative until it is so filed and where the disclaimer is in respect of a

leasehold interest, it shall be filed in Tribunal forthwith; the

notice of

the filing of the disclaimer shall be given to the persons interested in

the property

; the disclaimer shall contain particulars of the interest

disclaimed and a statement of the persons to whom

notice of the disclaimer has been given; a disclaimer shall be in

Form WIN

, and a notice of disclaimer in

Form WIN 86

, and where a disclaimer

has been filed in Tribunal, the CL shall file a copy thereof with the

Registrar of Companies.

•

162. Vesting of disclaimed property. -

•

(1) Where the disclaimed property is a leasehold interest and an

application is made under sub-section (6) of section 333 for an order

vesting the property in any person and it appears that there is an under-

 lessee or mortgagee or holder of a charge by way of demise in respect of

such property, claiming under the company,

the Tribunal may direct that

notice shall be given to such under-lessee, mortgagee or holder of charge

that if he does not elect to accept and apply for a vesting order upon the

terms required by the abovementioned sub-section and such other terms

as the Tribunal may think just, within a time to be fixed by the Tribunal

and stated in the notice, he will be excluded from all interest in and

security upon the property and the Tribunal may adjourn the application

for such notice to be given and for such under-lessee, mortgagee or

holder of charge, to be added as a party to and served with a copy of the

application, and to make, if he deem fit, such election and application as

is mentioned in the notice, and if at the expiration of the time so fixed by

the Tribunal, such underlessee, mortgagee or holder of charge, fails to

make such election and application, the Tribunal, may make an order

vesting the property in the applicant or other person who, in the opinion

of the Tribunal, may be entitled thereto, and excluding such under-lessee,

mortgagee or holder of charge, from all interest in or security upon the

property.

•

(2) An order requiring parties interested in a disclaimed lease to apply

for a vesting order or to be excluded from all interest in the lease shall be

in

Form WIN 87

, and an order vesting lease and excluding persons who

have not elected to apply, shall be in

Form WIN 88

•

Transfers, etc., After Commencement of

Winding Up to be Void.

•

334. In the case of a winding up by the

Tribunal, any disposition of the property

including actionable claims, of the company

and any transfer of shares in the company or

alteration in the status of its members, made

after the commencement of the winding up

shall, unless the Tribunal otherwise orders,

be void.

•

Certain Attachments, Executions, etc., in

Winding Up by Tribunal to be Void.

•

335.

 (1) Where any company is being wound

up by the Tribunal,—

a) any attachment, distress or execution put in

force, without leave of the Tribunal against the

estate or effects of the company, after the

commencement of the winding up; or

(b) any sale held, without leave of the Tribunal

of any of the properties or effects of the

company, after such commencement, shall be

void.

•

 (2) Nothing in this section shall apply to any

proceedings for the recovery of any tax or

impost or any dues payable to the

Government.

•

Offences by Officers of Companies in Liquidation.

•

336.

 (1) If any person, who is or has been an officer of a company which, at the time of

the commission of the alleged offence, is being wound up,

["by the Tribunal under this

Act or which is subsequently ordered to be wound up by the Tribunal under this Act,—

(a) does not, to the best of his knowledge and belief, fully and truly disclose to the

Company Liquidator all the property, movable and immovable, of the company, and

how and to whom and for what consideration and when the company disposed of any

part thereof, except such part as has been disposed of in the ordinary course of the

business of the company;

(b) does not deliver up to the Company Liquidator, or as he directs, all such part of the

movable and immovable property of the company as is in his custody or under his

control and which he is required by law to deliver up;

(c) does not deliver up to the Company Liquidator, or as he directs, all such books and

papers of the company as are in his custody or under his control and which he is

required by law to deliver up;

(d) within the twelve months immediately before the commencement of the winding

up or at any time thereafter,—

(i) conceals any part of the property of the company to the value of one thousand

rupees or more, or conceals any debt due to or from the company;

(ii) fraudulently removes any part of the property of the company to the value of one

thousand rupees or more;

(iii) conceals, destroys, mutilates or falsifies, or is privy to the concealment,

destruction, mutilation or falsification of, any book or paper affecting or relating to,

the property or affairs of the company;

(iv) makes, or is privy to the making of, any false entry in any book or paper affecting

or relating to, the property or affairs of the company;

(v) fraudulently parts with, alters or makes any omission in, or is privy to the

fraudulent parting with, altering or making of any omission in, any book or paper

affecting or relating to the property or affairs of the company;

(vi) by any false representation or other fraud, obtains on credit, for or on behalf of

the company, any property which the company does not subsequently pay for;

•

Offences by Officers of Companies in Liquidation. – Contd……..

(vii) under the false pretence that the company is carrying on its business, obtains on credit,

for or on behalf of the company, any property which the company does not subsequently

pay for; or

(viii) pawns, pledges or disposes of any property of the company which has been obtained

on credit and has not been paid for, unless such pawning, pledging or disposing of the

property is in the ordinary course of business of the company;

(e) makes any material omission in any statement relating to the affairs of the company;

(f) knowing or believing that a false debt has been proved by any person under the winding

up, fails for a period of one month to inform the Company Liquidator thereof;

(g) after the commencement of the winding up, prevents the production of any book or

paper affecting or relating to the property or affairs of the company;

(h) after the commencement of the winding up or at any meeting of the creditors of the

company within the twelve months next before the commencement of the winding-up,

attempts to account for any part of the property of the company by fictitious losses or

expenses; or

(i) is guilty of any false representation or fraud for the purpose of obtaining the consent of

the creditors of the company or any of them, to an agreement with reference to the affairs

of the company or to the winding up,

•

he shall be punishable with imprisonment for a term which shall not be less than three

years but which may extend to five years and with fine which shall not be less than one

lakh rupees but which may extend to three lakh rupees:

•

Provided that it shall be a good defence if the accused proves that he had no intent to

defraud or to conceal the true state of affairs of the company or to defeat the law.

•

(2) Where any person pawns, pledges or disposes of any property in circumstances

which amount to an offence under sub-clause (viii) of clause (d) of sub-section (1), every

person who takes in pawn or pledge or otherwise receives the property, knowing it to be

pawned, pledged, or disposed of in such circumstances as aforesaid, shall be punishable

with imprisonment for a term which shall not be less than three years but which may

extend to five years and with fine which shall not be less than three lakh rupees but

which may extend to five lakh rupees.

•

Explanation.—For the purposes of this section, the expression “officer” includes any

person in accordance with whose directions or instructions the directors of the company

have been accustomed to act.

•

Penalty for Frauds by Officers

337.

 If any person, being at the time of the commission

of the alleged offence an officer of a company which is

subsequently ordered to be wound up by the

Tribunal under this Act,—

(a) has, by false pretences or by means of any other

fraud, induced any person to give credit to the company;

(b) with intent to defraud creditors of the company or

any other person, has made or caused to be made any

gift or transfer of, or charge on, or has caused or

connived at the levying of any execution against, the

property of the company; or

(c) with intent to defraud creditors of the company, has

concealed or removed any part of the property of the

company since the date of any unsatisfied judgment or

order for payment of money obtained against the

company or within two months before that date, he shall

be punishable with imprisonment for a term which shall

not be less than one year but which may extend to three

years and with fine which shall not be less than one lakh

rupees but which may extend to three lakh rupees

•

Liability Where Proper Accounts not Kept.

•

338.

 (1) Where a company is being wound up, if it is shown that

proper books of account were not kept by the company

throughout the period of two years immediately preceding the

commencement of the winding up, or the period between the

incorporation of the company and the commencement of the

winding up, whichever is shorter, every officer of the company

who is in default shall, unless he shows that he acted honestly

and that in the circumstances in which the business of the

company was carried on, the default was excusable, be

punishable with imprisonment for a term which shall not be less

than one year but which may extend to three years and with fine

which shall not be less than one lakh rupees but which may

extend to three lakh rupees.

•

(2) For the purposes of sub-section (1), it shall be deemed that

proper books of account have not been kept in the case of any

company,—

•

(a) if such books of account as are necessary to exhibit and

explain the transactions and financial position of the business of

the company, including books containing entries made from day-

to-day in sufficient detail of all cash received and all cash paid,

have not been kept; and

(b) where the business of the company has involved dealings in

goods, statements of the annual stock takings and, except in the

case of goods sold by way of ordinary retail trade, of all goods

sold and purchased, showing the goods and the buyers and the

sellers thereof in sufficient detail to enable those goods and

those buyers and sellers to be identified, have not been kept.

•

Liability for Fraudulent Conduct of Business.

•

339.

 (1) If in the course of the winding up of a company, it appears that any business of the

company has been carried on with intent to defraud creditors of the company or any other

persons or for any fraudulent purpose, the Tribunal, on the application of the Official

Liquidator, or the Company Liquidator or any creditor or contributory of the company, may, if

it thinks it proper so to do, declare that any person, who is or has been a director, manager, or

officer of the company or any persons who were knowingly parties to the carrying on of the

business in the manner aforesaid shall be personally responsible, without any limitation of

liability, for all or any of the debts or other liabilities of the company as the Tribunal may

direct:

•

Provided that on the hearing of an application under this sub-section, the Official Liquidator or

the Company Liquidator, as the case may be, may himself give evidence or call witnesses.

•

(2) Where the Tribunal makes any such declaration, it may give such further directions as it

thinks proper for the purpose of giving effect to that declaration and, in particular,—

(a) make provision for making the liability of any such person under the declaration a charge

on any debt or obligation due from the company to him, or on any mortgage or charge or any

interest in any mortgage or charge on any assets of the company held by or vested in him, or

any person on his behalf, or any person claiming as assignee from or through the person liable

or any person acting on his behalf;

(b) make such further order as may be necessary for the purpose of enforcing any charge

imposed under this sub-section.

•

(3) Where any business of a company is carried on with such intent or for such purpose as is

mentioned in sub-section (1), every person who was knowingly a party to the carrying on of

the business in the manner aforesaid, shall be liable for action under

section 447

•

(4) This section shall apply, notwithstanding that the person concerned may be punishable

under any other law for the time being in force in respect of the matters on the ground of

which the declaration is to be made.

•

Explanation.—For the purposes of this section,—

(a) the expression “assignee” includes any person to whom or in whose favour, by the

directions of the person liable, the debt, obligation, mortgage or charge was created, issued or

transferred or the interest was created, but does not include an assignee for valuable

consideration, not including consideration by way of marriage, given in good faith and without

notice of any of the matters on the ground of which the declaration is made;

(b) the expression “officer” includes any person in accordance with whose directions or

instructions the directors of the company have been accustomed to act.

•

APPLICATION AGAINST DELINQUENT DIRECTORS, PROMOTERS AND

OFFICERS OF THE COMPANY

•

153. Application under section 339 or section 340.-

•

An application under sub-section (1) of section 339 or under sub-section

(1) of section 340, shall be made by a summons returnable in the first

instance in chambers and the summons shall state the nature of the

declaration or order for which the application is made, and the grounds of

the application, and shall be served on every person against whom an

order is sought not less than 7 days before the day named in the summons

for the hearing of the application, and it shall not be necessary to file

any affidavit or report before the return of the summons and the

summons shall be in

Form WIN 72

or

Form WIN 73

 with such variations as

may be necessary.

•

154. Directions at preliminary hearing of summons.

•

On the return of the summons, the Tribunal may give such directions as it

shall think fit as to whether points of claim and defence are to be

delivered, as to the taking of evidence wholly or in part by affidavit or

orally, as to the cross-examination, on the hearing, before the Tribunal or

of any deponents to affidavits in support of or in opposition to the

application, as to any report, the Tribunal may require the liquidator to

make, and generally as to the procedure on the summons and for

the hearing thereof, and points of claim to be delivered shall be in Form

WIN 74

or

Form WIN 75

 with such variations as may be necessary.

•

155. Liberty to apply for further directions. -

•

Where the Tribunal has directed that points of claim and defense shall

be delivered, it shall be open to either party who wishes to apply for

any further direction as to any interlocutory matter, to

apply, by restoration of the summons, before the summons has been set

down for trial, for such direction, upon giving two clear days' notice in

writing to the other party stating the grounds of the application and a

copy of the notice shall be filed with the Registry, two clear day's before

the day fixed for the hearing of the application.

•

Power of Tribunal to Assess Damages Against Delinquent

Directors, etc.

•

340.

 (1) If in the course of winding up of a company, it

appears that any person who has taken part in the

promotion or formation of the company, or any person, who

is or has been a director, manager, Company Liquidator or

officer of the company—

(a) has misapplied, or retained, or become liable or

accountable for, any money or property of the company; or

(b) has been guilty of any misfeasance or breach of trust in

relation to the company,

•

the Tribunal may, on the application of the Official

Liquidator, or the Company Liquidator, or of any creditor or

contributory, made within the period specified in that behalf

in sub-section (2), inquire into the conduct of the person,

director, manager, Company Liquidator or officer aforesaid,

and order him to repay or restore the money or property or

any part thereof respectively, with interest at such rate as

the Tribunal considers just and proper, or to contribute such

sum to the assets of the company by way of compensation in

respect of the misapplication, retainer, misfeasance or

breach of trust, as the Tribunal considers just and proper.

•

(2) An application under sub-section (1)shall be made

within

five years from the date of the winding up order

, or of the

first appointment of the Company Liquidator in the winding

up, or of the misapplication, retainer, misfeasance or breach

of trust, as the case may be, whichever is longer.

•

(3) This section shall apply, notwithstanding that the matter

is one for which the person concerned may be criminally

liable.

•

183. Costs in the discretion of Tribunal. -

•

Costs shall be in the discretion of the Tribunal.

•

184. Bill of costs by authorised representative, etc. employed by

CL.-

•

Every authorised representative, accountant, auctioneer or other person

employed by the CL in a winding up by the Tribunal, shall, on request by

the CL

deliver

his

bill of costs or charges to the CL

, and if he fails to do so

within 4 weeks of the receipt of the request

 or such extended time as the

Tribunal may allow, the CL shall declare and distribute the dividend

without regard to such person's claim and

the claim shall be forfeited

•

Provided that the

Tribunal may

, at any time before the declaration of

the final dividend, for good cause shown,

restore the claim and order the

bill to be received

 without prejudice to the distribution of dividends

declared prior to the making of the order, and the request by CL shall be

in

Form WIN 95

•

185. Fees in misfeasance proceeding.-

•

In

a proceeding against the persons referred to in sections 339 or 340, the

fees to authorised representatives shall be allowed as decided by the

Tribunal having regard to the nature and complexity of the case.

•

186. Fees when proceeding is compromised.-

•

Where

a proceeding is compromised prior to its being set down for

hearing, the fees to be allowed to authorised representatives of

the parties shall be as decided by the Tribunal having regard to the nature

and complexity of the case.

•

Power of Tribunal to Assess Damages Against Delinquent

Directors, etc. – Contd……

•

187. Costs of parties having common interest.-

•

(1) Where two or more petitions or applications raise a common

issue and are heard together and decided by a common

judgment, unless the Tribunal otherwise orders, only one set of

costs shall be allowed to all the parties together in the

said petitions or applications who have a common interest.

•

(2) Where different parties in the same proceeding have a

common interest, only one set of fees shall be allowed to all of

them together, though they may be represented by different

authorised representatives, unless the Tribunal

otherwise orders.

•

188. Tribunal's power to

fix

a fee. -

•

(1) Nothing in these rules shall be deemed to prevent

the Tribunal from fixing a fee for any matter if in any particular

case the Tribunal considers it necessary to do so in the

interest of justice.

•

(2) In any case where the contest has not been of a substantial

nature, the Tribunal may direct that the costs shall be on the

uncontested scale.

•

189. Allowance to witnesses.-

•

The

allowances to be made to witnesses shall be on the scales as

determined by the Tribunal.

•

Liability Under

Sections

and

 to Extend to Partners or

Directors in Firms or Companies

•

341.

 Where a declaration

under

section 339

 or an order

under

section 340

 is made in respect

of a firm or body corporate, the

Tribunal shall also have power to make

a declaration under

section 339

, or

pass an order under

section 340

, as

the case may be, in respect of any

person who was at the relevant time a

partner in that firm or a director of

that body corporate.

•

Prosecution of Delinquent Officers and Members of

Company

•

342.

 (1) If it appears to the Tribunal in the course of a

winding up by the Tribunal, that any person, who is or

has been an officer, or any member, of the company has

been guilty of any offence in relation to the company, the

Tribunal may, either on the application of any person

interested in the winding up or suo motu, direct the

liquidator to prosecute the offender or to refer the

matter to the Registrar.

•

(2)

[Omitted]

•

(3)

[Omitted]

•

(4)

[Omitted]

•

(5) When any prosecution is instituted under this section,

it shall be the duty of the liquidator and of every person,

who is or has been an officer and agent of the company

to give all assistance in connection with the prosecution

which he is reasonably able to give.

•

Explanation.—For the purposes of this sub-section, the

expression “agent”, in relation to a company, shall

include any banker or legal adviser of the company and

any person employed by the company as auditor.

•

(6) If a person fails or neglects to give assistance required

by sub-section (5), he shall be liable to pay fine which

shall not be less than twenty-five thousand rupees but

which may extend to one lakh rupees.

•

Company Liquidator to Exercise Certain Powers Subject to

Sanction.

•

343.

 (1) The Company Liquidator may, with the sanction of the

Tribunal, when the company is being wound up by the Tribunal,—

•

(i) pay any class of creditors in full;

•

(ii) make any compromise or arrangement with creditors or persons

claiming to be creditors, or having or alleging themselves to have

any claim, present or future, certain or contingent, against the

company, or whereby the company may be rendered liable; or

•

(iii) compromise any call or liability to call, debt, and liability capable

of resulting in a debt, and any claim, present or future, certain or

contingent, ascertained or sounding only in damages, subsisting or

alleged to subsist between the company and a contributory or

alleged contributory or other debtor or person apprehending

liability to the company, and all questions in any way relating to or

affecting the assets or liabilities or the winding up of the company,

on such terms as may be agreed, and take any security for the

discharge of any such call, debt, liability or claim, and give a

complete discharge in respect thereof.

•

(2) Notwithstanding anything contained in sub-section (1), in the

case of a winding up by the Tribunal, the Central Government may

make rules to provide that the Company Liquidator may, under such

circumstances, if any, and subject to such conditions, restrictions

and limitations, if any, as may be prescribed, exercise any of the

powers referred to in subclause (ii) or sub-clause (iii) of clause (b) of

sub-section (1) without the sanction of the Tribunal.

•

(3) Any creditor or contributory may apply in the manner prescribed

to the Tribunal with respect to any exercise or proposed exercise of

powers by the Company Liquidator under this section, and the

Tribunal shall after giving a reasonable opportunity to such applicant

and the Company Liquidator, pass such orders as it may think fit.

•

COMPROMISE OR ABANDONMENT OF CLAIMS

•

163. No claim to be compromised or abandoned without sanction

of

Tribunal.

•

In a winding up by the Tribunal, no claim by the company against any

person shall be compromised or abandoned by the CL without the

sanction of the Tribunal

upon notice to such person as the Tribunal

may direct.

•

164. Application for sanction of compromise.

•

Every application for sanction of a compromise or arrangement

referred to in clauses (ii) and (iii) of sub- section (1) of section 343

shall be accompanied by a copy of the proposed compromise or

arrangement and shall be

supported by an affidavit of the CL, along

with final report of the AC

; stating that for the reasons set out in the

affidavit he is satisfied that the proposed compromise or

arrangement is beneficial to the company.

•

Statement that Company is in Liquidation.

•

344.

 (1) Where a company is being wound

up, whether by the Tribunal or voluntarily,

every invoice, order for goods or business

letter issued by or on behalf of the

company or a Company Liquidator of the

company, or a receiver or manager of the

property of the company, being a

document on or in which the name of the

company appears, shall contain a

statement that the company is being

wound up.

•

(2) If a company contravenes the provisions

of sub-section (1), the company, and every

officer of the company, the Company

Liquidator and any receiver or manager,

who wilfully authorises or permits the non-

compliance, shall be punishable with fine

which shall not be less than fifty thousand

rupees but which may extend to three lakh

rupees.

•

Books and Papers of Company to be

Evidence

•

345.

 Where a company is being wound

up, all books and papers of the company

and of the Company Liquidator shall, as

between the contributories of the

company, be prima facie evidence of the

truth of all matters purporting to be

recorded therein.

•

Inspection of Books and Papers by Creditors

and Contributories.

•

346.

 (1) At any time after the making of an

order for the winding up of a company by the

Tribunal, any creditor or contributory of the

company may inspect the books and papers

of the company only in accordance with, and

subject to such rules as may be prescribed.

•

(2) Nothing contained in sub-section (1)shall

exclude or restrict any rights conferred by any

law for the time being in force—

(a) on the Central Government or a State

Government;

(b) on any authority or officer thereof; or

(c) on any person acting under the authority of

any such Government or of any such authority

or officer.

•

Disposal of Books and Papers of Company.

•

347.

 (1) When the affairs of a company have been completely

wound up and it is about to be dissolved, the books and papers

of such company and those of the Company  Liquidator may be

disposed of in such manner as the Tribunal directs.

•

(2) After the expiry of five years from the dissolution of the

company, no responsibility shall devolve on the company, the

Company Liquidator, or any person to whom the custody of the

books and papers has been entrusted, by reason of any book or

paper not being forthcoming to any person claiming to be

interested therein.

•

(3)The Central Government may, by rules,—

(a) prevent for such period as it thinks proper the destruction of

the books and papers of a company which has been wound up and

of its Company Liquidator; and

(b) enable any creditor or contributory of the company to make

representations to the Central Government in respect of the

matters specified in clause (a) and to appeal to the Tribunal from

any order which may be made by the Central Government in the

matter.

•

(4) If any person acts in contravention of any rule framed or an

order made under sub-section (3), he shall be punishable with

imprisonment for a term which may extend to six months or

with fine which may extend to fifty thousand rupees, or with

both.

•

Information as to Pending Liquidations.

•

348.

 (1) If the winding up of a company is not concluded within one year after its commencement, the

Company Liquidator shall, unless he is exempted from so doing, either wholly or in part by the #

Central

Government

, within two months of the expiry of such year and thereafter until the winding up is

concluded, at intervals of not more than one year or at such shorter intervals, if any, as may be

prescribed, file a statement in such form containing such particulars as may be prescribed, duly audited,

by a person qualified to act as auditor of the company, with respect to the proceedings in, and position

of, the liquidation, with the Tribunal:

•

Provided that no such audit as is referred to in this sub-section shall be necessary where the provisions

of section 294 apply;"]

•

(2) When the statement is filed with the Tribunal under clause (a) of sub-section (1), a copy shall

simultaneously be filed with the Registrar and shall be kept by him along with the other records of the

company.

•

(3) Where a statement referred to in sub-section (1)relates to a Government company in liquidation, the

Company Liquidator shall forward a copy thereof—

(a) to the Central Government, if that Government is a member of the Government company;

(b) to any State Government, if that Government is a member of the Government company; or

(c) to the Central Government and any State Government, if both the Governments are members of the

Government company.

•

(4) Any person stating himself in writing to be a creditor or contributory of the company shall be

entitled, by himself or by his agent, at all reasonable times, on payment of the prescribed fee, to inspect

the statement referred to in sub-section (1), and to receive a copy thereof or an extract therefrom.

•

(5) Any person fraudulently stating himself to be a creditor or contributory under subsection (4)shall be

deemed to be guilty of an offence under section 182 of the Indian Penal Code, and shall, on the

application of the Company Liquidator, be punishable accordingly.

•

(6) If a Company Liquidator contravenes the provisions of this section, the Company Liquidator shall be

punishable with fine which may extend to five thousand rupees for every day during which the failure

continues.

•

(7) If a Company Liquidator makes wilful default in causing the statement referred to in sub-section (1)

audited by a person who is not qualified to act as an auditor of the company, the Company Liquidator

shall be punishable with imprisonment for a term which may extend to six months or with fine which

may extend to one lakh rupees, or with both.

•

SALE BY CL

•

165. Sale to be subject to sanction and to confirmation by

Tribunal.

•

Unless the Tribunal otherwise orders, no property or asset

belonging to company which is being wound up by the Tribunal

shall be sold by the CL

without the previous sanction of

the Tribunal

, and every sale shall be subject to confirmation by

the Tribunal.

•

166. Procedure at sale. -

•

Every sale shall be held by the CL, or, if the Tribunal shall so

direct, by an agent or an auctioneer approved by the Tribunal,

and subject to such terms and conditions, if any, as may be

approved by the Tribunal and

all sales shall be made by public

auction or by inviting sealed tenders or by electronic bidding

or

in such manners as the Tribunal may direct.

•

167. Expenses of sale. -

•

Where property forming part of a company's assets is sold by

the CL through an auctioneer or other agent, the gross proceeds

of the sale shall, unless, the Tribunal otherwise orders, be paid

over to the liquidator by such auctioneer or agent and

the charges and

expenses connected with the sale shall

afterwards be paid to such auctioneer or agent in accordance

with the scales, if any, fixed by the Tribunal

•

Official Liquidator to Make Payments

into Public Account of India.

•

349.

 Every OL shall, in such manner and

at such times as may be prescribed, pay

the monies received by him as OL of any

company, into the public account of India

in the Reserve Bank of India.

•

Company Liquidator to Deposit Monies into Scheduled

Bank.

•

350.

 (1) Every Company Liquidator of a company shall, in

such manner and at such times as may be prescribed,

deposit the monies received by him in his capacity as

such in a scheduled bank to the credit of a special bank

account opened by him in that behalf:

•

Provided that if the Tribunal considers that it is

advantageous for the creditors or contributories or the

company, it may permit the account to be opened in such

other bank specified by it.

•

(2) If any Company Liquidator at any time retains for

more than ten days a sum exceeding five thousand

rupees or such other amount as the Tribunal may, on the

application of the Company Liquidator, authorise him to

retain, then, unless he explains the retention to the

satisfaction of the Tribunal, he shall—

(a) pay interest on the amount so retained in excess, at

the rate of twelve per cent. per annum and also pay such

penalty as may be determined by the Tribunal;

(b) be liable to pay any expenses occasioned by reason of

his default; and

(c) also be liable to have all or such part of his

remuneration, as the Tribunal may consider just and

proper, disallowed, or may also be removed from his

office.

•

BANKING ACCOUNT OF CL

•

81. All money to be paid into special bank account in a scheduled

bank.-

•

(1) The CL shall

deposit

 into a

special bank account in his official name

 opened in

any

scheduled bank or any other bank as may be permitted by the Tribunal

 (hereinafter

referred to as the bank) , all moneys including cheques and demand drafts received by

him as the CL of the company, and the realisations of each day shall be deposited in

the bank without deduction,

not later than the next working day

 of the bank and the

CL may maintain a

petty cash of five thousand rupees or such higher amount as may

be permitted by the Tribunal

 to meet day to day expenses, and

all payments above Rs.

2,000/-

 shall be made by cheque drawn against the said account.

•

(2) The CL shall make

quarterly reports to the Tribunal

 regarding the funds, including

filing the bank statements of the special bank account.

•

BANKING ACCOUNT OF CL

•

82. Bills, cheques, etc. to be deposited with bank.-

•

All bills, cheques, hundies, notes and other securities payable to the company or to

the CL thereof shall, as soon as they come into the hands of the CL, be deposited by

him with the bank for the purpose of being presented for acceptance and payment or

for payment only, as the case may be and the proceeds when realised shall be

credited by the bank to the special bank account.

•

83. Payments into Bank.-

•

Where the

Tribunal makes an order directing any person to pay any money

 due to the

company into the special bank account maintained by the CL, the person so

directed shall, at the time of making the payment,

produce to the bank a

certified copy of the order or a payment in challan endorsed by the CL under his

signature

 and the person making the payment shall give

notice thereof to the CL and

produce before him the bank receipt

 relating thereto.

•

84. CL's Dividend Account.-

•

The CL shall also open a separate

dividend account for the company

 under liquidation

with the sanction of the Tribunal, in any scheduled bank, under the name

'the

Dividend Account of.. (name of the company) in liquidation

' into which account he

shall, upon a declaration of dividend being made in the winding up of the company,

deposit by transfer from special bank account

, the total amount of the dividend

payable upon such declaration and there shall be a

separate such account in respect

of each declaration of dividend

 and all payments of dividend shall be made from the

said CL's dividend account and any

unpaid balance

 in the said account shall be

transferred to the Company Liquidation Dividend and Undistributed Assets Account

referred to in sub-section (1) of section 352, and all payments of dividends shall be

made by cheques or through Electronic Clearing System drawn against the said

account.

•

Liquidator Not to Deposit Monies into Private

Banking Account.

•

351.

 Neither the OL nor the CL of a company

shall deposit any monies received by him in his

capacity as such into any private banking

account.

•

86. Investment of surplus funds.-

•

(1) All such money for the time being standing to the credit of the CL at the bank as is not immediately

required for the purposes of winding up, shall be

invested in Government securities

 or in

interest bearing

deposits in any scheduled bank

 in the name of the company in liquidation or provisional

liquidation represented by CL of the company to which the funds belong and such funds so invested shall be

monitored regularly by the CL and the returns also containing the

details of fixed deposit receipts shall be

submitted to the Tribunal

•

(2) Where the fixed deposit has matured, it

shall not be automatically renewed

 but the CL shall carry out the

due diligence to assess whether a higher rate of interest is available in any other scheduled bank

 and the

said

Liquidator shall report the conclusion of such due diligence to the Tribunal

, and in the event a higher

rate of interest is available in any other scheduled bank, the said Liquidator shall apply for the

leave of the

Tribunal to invest the surplus funds in such other scheduled bank

 offering higher rate of interest.

•

87. CL to examine accounts for purposes of

investment.-

•

The CL shall, at the end of every month, examine account of liquidation to ascertain what moneys are

available for investment, and shall make an entry at the end of every month in the record book relating to

the company of his having examined the account for the purpose and of the decision taken by him regarding

the investment, and in case he decides not to invest any surplus funds, the reasons for such decision.

•

88. Investments to be made by Bank.-

•

All investments shall be made by the bank upon the written request of the CL but the securities shall be

retained in the bank in the name and on behalf of the CL, and shall not be sold except by the bank and

under the written instructions of the CL, and when the securities are sold, the proceeds shall be credited by

the bank to the account of the CL.

•

89. Dividend and interest to be credited.-

•

All dividends and interest accruing from any securities or investments shall from time to time be received by

the bank and placed to the credit of the account of the CL and intimation thereof shall be given to the CL,

who shall thereupon credit such dividend or interest in his account to the company to which the security or

the investment relating thereto belongs.

•

90. Refunds of taxes.-

•

The CL shall claim such refunds of income-tax or other taxes as may be due.

•

Company Liquidation Dividend and Undistributed Assets Account.

•

352.

 (1) Where any company is being wound up and the liquidator has in

his hands or under his control any money representing—

(a) dividends payable to any creditor but which had remained unpaid for

six months after the date on which they were declared; or

(b) assets refundable to any contributory which have remained

undistributed for six months after the date on which they become

refundable, the liquidator shall forthwith deposit the said money into a

separate special account to be known as the Company Liquidation

Dividend and Undistributed Assets Account maintained in a scheduled

bank.

•

(2) The liquidator shall, on the dissolution of the company, pay into the

Company Liquidation Dividend and Undistributed Assets Account any

money representing unpaid dividends or undistributed assets in his hands

at the date of dissolution.

•

(3)The liquidator shall, when making any payment referred to in sub-

sections (1) and (2), furnish to the Registrar, a statement in the prescribed

form, setting forth, in respect of all sums included in such payment, the

nature of the sums, the names and last known addresses of the persons

entitled to participate therein, the amount to which each is entitled and

the nature of his claim thereto, and such other particulars as may be

prescribed.

•

(4) The liquidator shall be entitled to a receipt from the scheduled bank

for any money paid to it under sub-sections (1) and (2), and such receipt

shall be an effectual discharge of the Company Liquidator in respect

thereof.

•

(5) Where a company is being wound up voluntarily, the Company

Liquidator shall, when filing a statement in pursuance of sub-section (1)

of

section 348,

 indicate the sum of money which is payable under sub-

sections (1) and (2) of this section during the six months preceding the

date on which the said statement is prepared, and shall, within fourteen

days of the date of filing the said statement, pay that sum into the

Company Liquidation Dividend and Undistributed Assets Account.

•

179. Statement to accompany payment. -

•

(1) The statement to be furnished, under section sub-section (3) of 352 to

the Registrar of Companies, by the liquidator when making any payment

of unclaimed dividends or undistributed assets into the Company

Liquidation Dividend and Undistributed Assets Account in a scheduled

bank under subsections (1) and (2) of the said section, shall be in Form

WIN 94.

•

(2) The liquidator shall, whenever called upon by the Registrar

of Companies so to do , certify whether a person claiming payment from

the Company Liquidation Dividend and Undistributed Assets Account

under sub-section (7) of section 352 is or is not entitled to the. whole or

any part of the amount claimed.

•

180. Unclaimed dividends or undistributed assets under investment.

•

For purposes of payment of unclaimed dividends and undistributed

assets into the Company Liquidation Dividend and Undistributed

Assets Account, money invested or deposited at interest by the liquidator

shall be deemed to be money in his hand, and when such money forms

part of the unclaimed dividends or undistributed assets of the company,

the liquidator shall realise the investment or withdraw the deposit and

shall pay the proceeds into the Company Liquidation Dividend

and Undistributed Assets

•

181. Application by person for payment of money paid into the

Company

Liquidation Dividend and Undistributed Assets Account.-

•

An application under sub-section (6) of section 352 by any person

claiming to be entitled to any money paid into the Company Liquidation

Dividend and Undistributed Assets Account for payment of such money

shall state whether the applicant had made an application to the Central

Government for the payment, and, if so, the result of the application.

•

Company Liquidation Dividend and Undistributed Assets Account. – Contd….

•

(6) Any person claiming to be entitled to any money paid into the Company

Liquidation Dividend and Undistributed Assets Account, whether paid in

pursuance of this section or under the provisions of any previous company law

may apply to the Registrar for payment thereof, and the Registrar, if satisfied

that the person claiming is entitled, may make the payment to that person of

the sum due:

•

Provided that the Registrar shall settle the claim of such person within a period

of sixty days from the date of receipt of such claim, failing which the Registrar

shall make a report to the Regional Director giving reasons of such failure.

•

(7) Any money paid into the Company Liquidation Dividend and Undistributed

Assets Account in pursuance of this section, which remains unclaimed

thereafter for a period of fifteen years, shall be transferred to the general

revenue account of the Central Government, but a claim to any money so

transferred may be preferred under sub-section (6) and shall be dealt with as if

such transfer had not been made and the order, if any, for payment on the

claim will be treated as an order for refund of revenue.

•

(8) Any liquidator retaining any money which should have been paid by him

into the Company Liquidation Dividend and Undistributed Assets Account

under this section shall—

(a) pay interest on the amount so retained at the rate of twelve per cent. per

annum and also pay such penalty as may be determined by the Registrar:

•

Provided that the Central Government may in any proper case remit either in

part or in whole the amount of interest which the liquidator is required to pay

under this clause;

(b) be liable to pay any expenses occasioned by reason of his default; and

(c) where the winding up is by the Tribunal, also be liable to have all or such

part of his remuneration, as the Tribunal may consider just and proper, to be

disallowed, and to be removed from his office by the Tribunal.

•

182. Cost and expenses payable out of the assets in a winding up by

Tribunal. -

•

(1) The assets of a company in a winding up by the Tribunal remaining after payment

of the fees and expenses properly incurred in preserving, realising or getting in the

assets shall, subject to any order of the Tribunal and to the rights of secured creditors

if any, be liable to the following payments which shall be made in the following order

of priority, namely:-

•

First- the taxed costs of the petition including the taxed costs of any person appearing

on the petition, whose costs are allowed by the Tribunal;

•

Next-the costs and expenses of any person who makes, or concurs making, the

company's statement of affairs;

•

Next-the necessary disbursements of the CL other than expenses properly incurred in

preserving, realising or getting in the properties of the company;

•

Next-the cost of any person properly employed by the CLs;

•

Next-the cost, charges and expenses incurred by the liquidator;

•

Next-the actual out of pocket expenses necessarily incurred by the members of the

AC, and sanctioned by the Tribunal.

•

(2) Save as otherwise ordered by the Tribunal, no payments in respect of bills of

authorised representatives, shall be allowed out of the assets of the company without

proof that the same have been considered and allowed by the taxing officer of the

Tribunal and the taxing officer shall before passing the bills or charges of an authorised

representative, satisfy himself that the appointment of an authorised representative to

assist the liquidator in the performance of his duties has been duly sanctioned.

•

(3) Nothing contained in this rule shall apply to or affect costs which, in the course of

legal proceedings by or against the company which is being wound up by the Tribunal,

are ordered by the Tribunal in which such proceedings are pending, to be paid by the

company or the liquidator, or the rights of the person to whom such costs are payable.

•

DIVIDENDS AND RETURNS OF CAPITAL IN WINDING UP BY

TRIBUNAL

•

168. Declaration of dividend or return of capital. -

•

No dividend to creditors or return of capital to contributories shall be declared by the CL without the

sanction of the Tribunal.

•

169. Notice of declaration.

•

The CL shall give notice of the declaration of dividend not less than 15 days prior to the date fixed for the

payment thereof and unless otherwise directed by the Tribunal, such notice shall be given by advertisement

in such newspapers as the Tribunal shall direct and by sending by registered or speed post and electronic

mode if any, a notice to every person whose name appears in the list of creditors as on such date and the

advertisement shall be in Form WIN 89 and the notice to creditor in Form WIN 90.

•

170. Form of authority to pay dividend.

•

A person to whom dividend is payable may lodge with the CL an authority in writing to pay such dividend to

another person named therein and such authority shall be in

Form WIN 91

•

171. Transmission of dividends, etc. by post.

•

Dividends and returns of capital may, at the request and risk and cost of the person to whom they are

payable, be transmitted to him by money order, or to his bank account through electronic means as may be

appropriate.

•

172. Form of order directing return of capital.

•

Every order by which the CL is authorised to make a return to contributories of the company, shall, unless

the Tribunal otherwise directs, contain or have appended thereto a schedule or list (which the CL shall

prepare) setting out in a tabular form the full names and addresses of the persons to whom the return is to

be paid, and the amount of money payable to each person, and particulars of the transfers of shares (if

any) which have been made or the variations in the list of contributories which have arisen since the date of

the settlement of the list and such other information as may be necessary to enable the return to be made

and the schedule or list shall be in Form WIN 92 with such variations as circumstances shall require and the

CL shall send a notice of return to each contributory by registered or speed post and electronic mode if any

in

Form WIN 93

•

173. Payment of dividend or return of capital due to deceased creditor

or contributory. -

•

Where a claim made in respect of a dividend due to a deceased creditor or a return of capital due to a

deceased contributory is one lakh rupees or less, the CL may, upon satisfying himself as to the claimant's

right and title to receive the dividend or the return, as the case may be, apply to the Tribunal for sanctioning

the payment of such dividend or return to the claimant without the production of a succession certificate or

like authority, however, in respect of the claim mentioned above, pertaining to a deceased creditor

or contributory where the claim amount is one lakh rupees or less, in lieu of succession certificate, the

claimant shall produce Family Member Certificate issued by competent authority in the State Government

or Union territory, as the case may be, and where the Tribunal sanctions the payment, the CL shall make the

payment upon obtaining a personal indemnity as well as an affidavit duly stamped from the payee.

•

Liquidator to Make Returns, etc.

•

353.

 (1) If any Company Liquidator who has made

any default in filing, delivering or making any

return, account or other document, or in giving any

notice which he is by law required to file, deliver,

make or give, fails to make good the default within

fourteen days after the service on him of a notice

requiring him to do so, the Tribunal may, on an

application made to it by any contributory or

creditor of the company or by the Registrar, make

an order directing the Company Liquidator to make

good the default within such time as may be

specified in the order.

•

(2) Any order under sub-section (1) may provide

that all costs of, and incidental to, the application

shall be borne by the Company Liquidator.

•

(3) Nothing in this section shall prejudice the

operation of any enactment imposing penalties on

a Company Liquidator in respect of any such

default as aforesaid.

•

Meetings to Ascertain Wishes of Creditors or

Contributories.

•

354.

 (1) In all matters relating to the winding up of a

company, the Tribunal may—

(a) have regard to the wishes of creditors or

contributories of the company, as proved to it by any

sufficient evidence;

(b) if it thinks fit for the purpose of ascertaining those

wishes, direct meetings of the creditors or

contributories to be called, held and conducted in

such manner as the Tribunal may direct; and

(c) appoint a person to act as chairman of any such

meeting and to report the result thereof to the

Tribunal.

•

(2) While ascertaining the wishes of creditors under

sub-section (1), regard shall be had to the value of

each debt of the creditor.

•

(3) While ascertaining the wishes of contributories

under sub-section (1), regard shall be had to the

number of votes which may be cast by each

contributory.

•

Court, Tribunal or Person, etc., Before Whom

Affidavit May be Sworn.

•

355.

 (1) Any affidavit required to be sworn under

the provisions, or for the purposes, of this

Chapter may be sworn—

(a) in India before any court, tribunal, judge or

person lawfully authorised to take and receive

affidavits; and

(b) in any other country before any court, judge

or person lawfully authorised to take and receive

affidavits in that country or before an Indian

diplomatic or consular officer.

•

(2) All tribunals, judges, Justices, commissioners

and persons acting judicially in India shall take

judicial notice of the seal, stamp or signature, as

the case may be, of any such court, tribunal,

judge, person, diplomatic or consular officer,

attached, appended or subscribed to any such

affidavit or to any other document to be used for

the purposes of this Chapter.

•

Powers of Tribunal to Declare Dissolution of

Company Void.

•

356.

 (1) Where a company has been dissolved,

whether in pursuance of this Chapter or

of

section 232

 or otherwise, the Tribunal may at

any time

within two years of the date of the

dissolution

, on application by the CL or by any

other person who appears to the Tribunal to be

interested, make an order, upon such terms as

the Tribunal thinks fit, declaring the dissolution

to be void, and thereupon such proceedings may

be taken as if the company had not been

dissolved.

•

(2) It shall be the duty of the CL or the person on

whose application the order was made,

within

30 days

after the making of the order or such

further time as the Tribunal may allow, to file a

certified copy of the order with the Registrar

who shall register the same, and if the CL or the

person fails so to do, the Company Liquidator or

the person shall be punishable with

fine which

may extend to Rs. 10,000/- for every day

during

which the default continues.

•

TERMINATION OF WINDING UP

•

178. Application to declare dissolution void.-

•

An

application under section 356 shall be

made upon

notice to the Central

Government and the ROC

and where the

Tribunal declares the dissolution to have

been void, the order shall direct that the

applicant shall file a

certified copy of the

order

with the ROC

not later than

21 days

from the date of the order.

•

Commencement of Winding Up by

Tribunal.

•

357. The winding up of a company by the

Tribunal under this Act shall be deemed to

commence at the time of the presentation

of the petition for the winding  up.

•

Exclusion of Certain Time in Computing

Period of Limitation.

•

358.

 Notwithstanding anything in the

Limitation Act, 1963, or in any other law for

the time being in force, in computing the

period of limitation specified for any suit or

application in the name and on behalf of a

company which is being wound up by the

Tribunal, the period from the date of

commencement of the winding up of the

company to a period of one year

immediately following the date of the

winding up order shall be excluded.

•

Appointment of OL.

•

359.

 (1) For the purposes of this Act, so far as

it relates to the winding up of companies by

the Tribunal, the Central Government may

appoint as many OLs, Joint, Deputy or

Assistant Official Liquidators as it may

consider necessary to discharge the

functions of the OL.

•

(2) The liquidators appointed under sub-

section (1)shall be whole-time officers of the

Central Government.

•

(3) The salary and other allowances of the

OL, Joint OL, Deputy OL and Assistant OL

shall be paid by the Central Government

•

Powers and Functions of OL.

•

360.

 (1)The Official Liquidator shall exercise

such powers and perform such duties as

the Central Government may prescribe.

•

(2) Without prejudice to the provisions of

sub-section (1), the Official Liquidator

may—

(a) exercise all or any of the powers as may

be exercised by a Company Liquidator under

the provisions of this Act; and

(b) conduct inquiries or investigations, if

directed by the Tribunal or the Central

Government, in respect of matters arising

out of winding up proceedings.

•

Summary Procedure for Liquidation.

•

361.

 (1) Where the company to be wound up under this Chapter,

—

(i) has assets of book value not exceeding Rupees 1 Cr.; and

(ii) belongs to such class or classes of companies as may be

prescribed, the

Central Government

 may order it to be wound

up by summary procedure provided under this Part.

•

(2) Where an order under sub-section (1) is made, the

Central

Government

 shall appoint the Official Liquidator as the liquidator

of the company.

•

(3) The Official Liquidator shall forthwith take into his custody or

control all assets, effects and actionable claims to which the

company is or appears to be entitled.

•

(4) The Official Liquidator shall, within thirty days of his

appointment, submit a report to the

Central Government

 in such

manner and form, as may be prescribed, including a report

whether in his opinion, any fraud has been committed in

promotion, formation or management of the affairs of the

company or not.

•

(5) On receipt of the report under sub-section (4), if the

Central

Government

 is satisfied that any fraud has been committed by

the promoters, directors or any other officer of the company, it

may direct further investigation into the affairs of the company

and that a report shall be submitted within such time as may be

specified.

•

(6) After considering the investigation report under sub-section

(5), the

Central Government

 may order that winding up may be

proceeded

under Part I of this Chapter or under the provision of

this Part

•

PART V- SUMMARY PROCEDURE FOR LIQUIDATION

•

190. Powers and functions of OL. -

•

(1) The OL shall exercise the powers and perform

the duties as specified in the Act and these rules.

•

(2) For the purpose of section 361(1)(ii) , the class

of companies shall be as under, based on the latest

audited Balance Sheet:-

•

(a) Taken deposit and total o/s deposits is not

exceeding Rs. 25 Lakhs; or

•

(b) Total o/s loan including secured loan does not

exceed Rs. 50 Lakhs; or

•

(c) Turnover is upto Rs. 50 Crores; or

•

(d) Paid up capital does not exceed Rs. 1 crore.

•

(3) The OL shall maintain the Registers and books

of accounts in the manner provided in rules 79 and

80.

•

(4) For the purpose of filing and audit of the OL's

accounts, the procedure laid down in the preceding

rules 91 to 99 shall be followed but wherever the

word

Tribunal

 is mentioned, it shall be

read as

Central Government

and with further directions

issued by the Central Government.

•

Sale of Assets and Recovery of Debts Due

to Company

•

362.

 (1) The OL shall expeditiously dispose

of all the assets whether movable or

immovable

within 60 days of his

appointment

•

(2) The OL shall serve a notice within 30

days of his appointment calling upon the

debtors / contributories, to deposit within

30 days with him the amount payable to

the company.

•

(3) Where any debtor does not deposit the

amount under sub-section (2), the

Central

Government

 may, on an application made

to it by the OL, pass such orders as it thinks

fit.

•

(4)The amount recovered under this

section by the OL shall be deposited in

accordance with the provisions of

section

349.

•

190. Powers and functions of OL. – Contd…

•

(5) The OL shall dispose of all the assets in the

manner as described in preceding rules 165 to

167;

Tribunal

shall be read as

Central Government

 and with further directions

issued by the Central Government .

•

(6) The monies received by the OL as referred to

in section 349 shall be paid by him into the

public

account of India in the RBI

as mentioned in that

section not later than the next working day of

the said Bank.

•

(7) For the purposes of section 363, the creditors

of the company shall prove their claim in the

manner as provided under rules 100 to 125,

with the modification and directions by Central

Government as mentioned in sub-rule (4).

•

(8) In the absence of any rules under this Part, on

any subject for conduct of liquidation proceeding

by the OL, the relevant rules in the other Parts of

these rules shall be followed with

necessary modifications as directed by the

Central Government.

•

Settlement of Claims of Creditors by

Official Liquidator.

•

363.

 (1) The OL within 30 days of his

appointment shall call upon the creditors

of the company to prove their claims in

such manner as may be prescribed, within

thirty days of the receipt of such call.

•

(2) The OL shall prepare a list of claims of

creditors in such manner as may be

prescribed and each creditor shall be

communicated of the claims accepted or

rejected along with reasons to be recorded

in writing.

•

Appeal by Creditor.

•

364.

 (1) Any creditor aggrieved by the decision

of the Official Liquidator under

section 363

may

file an appeal before the

Central

Government

 within thirty days of such

decision.

•

(2) The

Central Government

 may after calling

the report from the Official Liquidator either

dismiss the appeal or modify the decision of

the Official Liquidator.

•

(3)The Official Liquidator shall make payment

to the creditors whose claims have been

accepted.

•

(4) The

Central Government

 may, at any stage

during settlement of claims, if considers

necessary, refer the matter to the Tribunal for

necessary orders

•

Order of Dissolution of Company

•

365.

 (1) The Official Liquidator shall, if

he is satisfied that the company is

finally wound up, submit a final report

to—

(i) the

Central Government

, in case no

reference was made to the Tribunal

under sub-section (4) of

section

364;

and

•

(ii) in any other case, the

Central

Government

 and the Tribunal.

•

(2) The

Central Government

, or as the

case may be, the Tribunal on receipt of

such report shall order that the

company be dissolved.

•

(3) Where an order is made under sub-

section (2), the Registrar shall strike off

the name of the company from the

register of companies and publish a

notification to this effect.

•

MISCELLANEOUS

•

191. Inspection of file. -

•

(1) Every duly authorised officer of the

Central Government and, save as otherwise

provided by these rules, every person who has

been a director or officer of a company which is

being wound-up, shall be entitled

, free of charge

at all reasonable times to inspect the file of

proceedings of the liquidation, and to take copies

or extracts from any document therein on payment

at the rate of Rs. 5 per page, to be furnished with

such copies or extracts.

•

(2) Save as otherwise provided by these rules,

every

contributory / creditor

whose claim or proof

has been admitted

, shall be entitled, at

all reasonable times to inspect the file of

proceedings on payment of Rs. 100 and to be

furnished with copies and extracts from

any document therein at the rate of Rs. 5 per page.

THANK YOU

Shailesh Dayal

Partner, Dayal & Maur

Company Secretaries

2/6A, LGF, Jungpura A, New Delhi – 14

dayalmaur@gmail.com

Cell: 9811 255 855

Ph: 011-4753 4394

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The Companies (Winding Up) Rules, 2020 provide guidelines for winding up a company by the Tribunal under the Companies Act, 2013. The rules cover various aspects such as modes of winding up, circumstances under which a company may be wound up by the Tribunal, definitions, forms, and more. It specifies that the rules apply to winding up under the Companies Act, 2013 and came into force on April 1, 2020. The provisions also address issues like fraudulent conduct, default in filing financial statements, and just and equitable winding up of a company.

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COMPANIES (WINDING UP) RULES, 2020 AN OVERVIEW PART 1 - GENERAL PART II - WINDING UP BY TRIBUNAL PART III - DEBTS AND CLAIMS AGAINST COMPANY PART IV - COSTS, ETC. PART V - SUMMARY PROCEDURE FOR LIQUIDATION PART VI. MISCELLANEOUS FORMS WIN 1 TO WIN 95

CHAPTER XX CHAPTER XX - - WINDING UP Modes of Winding Up. 270. The provisions of Part I shall apply to the winding up of a company by the Tribunal under this Act. WINDING UP 1. Short title, commencement and application.- (1) These rules may be called the Companies (Winding Up) Rules, 2020. (2) They shall come into force on the 1 st day of April, 2020. (3) These rules shall apply to winding up under of Companies Act 2013 (18 of 2013). 2. Definitions.- In these rules, unless the context or subject matter otherwise requires, - (a) "Act" means the Companies Act, 2013 (18 of 2013); (b) "Form" means a Form annexed to these rules; (c) "Registrar" means the Registrar of the National Company Law Tribunal or National Company Law Appellate Tribunal and includes such other officer of the Tribunal or Bench thereof to whom the powers and functions of the Registrar are assigned; (d) "Registry" means the Registry of the Tribunal or any of its Benches or of the Appellate Tribunal, (e) "Section" means section of the Act; (f) words and expressions used and not defined in these rules but defined in the Act respectively assigned to them in the Act. shall have the meanings

PART I PART I Winding up by the Tribunal Winding up by the Tribunal Circumstances in Which Company May be Wound Up by Tribunal 271.A company may, on a petition under section 272, be wound up by the Tribunal, (a) if the company has, by special resolution, resolved that the company be wound up by the Tribunal; (b) if the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality; (c) if on an application made by the Registrar or any other person authorised by the Central Government by notification under this Act, the Tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purpose or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound up (d) Default in filing with the ROC its financial statements or annual returns for immediately preceding five consecutive financial years; or (e) if the Tribunal is of the opinion that it is just and equitable that the company should be wound up."

Petition for Winding Up. 272. (1) A petition to the Tribunal for the winding up of a company shall be presented by (a) the company; (b) any contributory or contributories; (c) all or any of the persons specified above; (d) the Registrar; (e) any person authorised by the Central Government in that behalf; or (f) in a case falling under clause (b) of section 271, by the Central Government or a State Government. (2) A contributory may present a petition even if it holds fully paid-up shares, or company has no assets or no surplus assets left for distribution among the shareholders after the satisfaction of its liabilities, and shares in respect of which he is a contributory or some of them were either originally allotted or have been held by him, and registered in his name, for at least 6 months during the 18 months immediately before the commencement of the winding up or have devolved on him through the death of a former holder.

Petition for Winding Up. Contd (3) The ROC shall be entitled to present a petition for winding up under section 271, except on the grounds specified in clause (a), Provided that ROC shall obtain the previous sanction of the Central Government to the presentation of a petition, Provided further that the Central Government shall not accord its sanction unless the company has been given a reasonable opportunity of making representations. (4) A petition presented by the company for winding up before the Tribunal shall be admitted only if accompanied by a statement of affairs in such form and in such manner as may be prescribed. (5) A copy of the petition made under this section shall also be filed with the ROC and the ROC shall, without prejudice to any other provisions, submit his views to the Tribunal within 60 days of receipt of such petition. 3. Petition for winding up.- (1) For the purposes of sub-section (1) of section 272, a petition for winding up of a company shall be presented in Form WIN 1 or Form WIN 2, as the case may be, with such variations as the circumstances may require, and shall be presented in triplicate. (2) Every petition shall be verified by an affidavit made by the petitioner or by the petitioners, there are more than one petitioners, and in case the petition is presented by a body corporate, Director, Secretary or any other author ised person thereof, and such affidavit shall be in Form WIN 3. where by the

Petition for Winding Up. 5. Admission of petition and directions as to advertisement.- Petition shall be posted before the Tribunal for admission and fixing a date for the hearing and for appropriate directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served, and where the petition has been filed by a person other than the company, the Tribunal may, if it thinks fit, direct notice to be given to the company before giving directions as to the advertisement of the petition. petitioner to bear all costs of the advertisement. 6. Copy of petition to be furnished.- Every contributory of the company shall be entitled to be furnished by the petitioner or by his authorised representative with a copy of the petition within 24 hours of his requiring the same on payment of Rs. 5/- per page. 7. Advertisement of petition.- Subject to any directions of the Tribunal, notice of the petition shall be advertised not less than 14 days before the date fixed for hearing in any daily newspaper in English and vernacular language widely circulated in the State or Union territory in which the registered office of the company is situated, and the advertisement shall be in Form WIN 6. 8. Application for leave to withdraw petition.- (1) A petition for winding up shall not be withdrawn after presentation without the leave of the Tribunal subject to compliance with any order of the Tribunal, including as to costs. (2) An application for leave to withdraw a petition for winding up which has been advertised in accordance with the provisions of rule 7 shall not be heard at any time before the date fixed in the advertisement for the hearing of the petition.

(a) Where a petitioner - (i) is not entitled to present a petition; or (ii) fails to advertise his petition within the time prescribed by these rules or by order of Tribunal; or (iii) consents to withdraw the petition, or to allow it to be dismissed, or fails to appear in support of his petition when it is called on in Tribunal on the day originally fixed for the hearing thereof, or any day to which the hearing has been adjourned; or (iv) if appearing, does not apply for an order in terms of the prayer of his petition; or, (b) where in the opinion of the Tribunal there is other sufficient cause for an order being made under this rule, the Tribunal may,, substitute as petitioner any other person who, in the opinion of the Tribunal, would have a right to present a petition, and who is desirous of prosecuting the petition. 10. Procedure on substitution.- Where the Tribunal makes an order substituting a contributory as petitioner in a winding up petition, it shall adjourn the hearing to a date to be fixed by the Bench and direct such amendments of the petition as may be necessary and such contributory shall, within 7 days from the making of the order, amend the petition accordingly, and file 2 legible and clean copies thereof together with an affidavit in duplicate setting out the grounds, on which he supports the petition and the amended petition shall be treated as the petition for the winding up of the company and shall be deemed to have been presented on the date on which the original petition was presented. 11. Affidavit-in-objection.- Any affidavit in objection to the petition under sub-section (1) of section 272 shall be filed within 30 days from the date of order, and a copy of the affidavit shall be served on the petitioner or his authorised representative forthwith and copies of the affidavit shall also be given to any contributory appearing in support of the petition who may require the same on payment of five rupees per page within 3 working days. 12. Affidavit in reply.- An affidavit in reply to the affidavit in objection to the petition shall be filed not less than seven days before the day fixed for the hearing of the petition, and a copy of the affidavit in reply shall be served on the day of the filing thereof on the person by whom the affidavit in objection was filed or his authorised representative. 9. Substitution for original petitioner.-

Powers of Tribunal. 273. (1) The Tribunal may, on receipt of a petition for winding up under section 272 pass any of the following orders, namely: (a) dismiss it, with or without costs; (b)make any interim order as it thinks fit; (c) appoint a provisional liquidator of the company till the winding uporder; (d) make an order for the winding upof the company with or without costs; or (e) any other order as it thinks fit: Provided that an order under this sub-section shall be made within 90 days from the date of presentation of the petition: Provided further that before appointing a provisional liquidator under clause (c), the Tribunal shall give notice to the company, unless for special reasons to be recorded in writing, the Tribunal thinks fit to dispense with such notice: Provided also that the Tribunal shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged for an amount equal to or in excess of those assets, or that the company has no assets. (2) Where a petition is presented on the ground that it is just and equitable that the company should be wound up, the Tribunal may refuse to make an order of winding up, if it is of the opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing the other remedy.

4. Statement of affairs.- The statement of affairs, as required to be filed under section 272 or section 274, shall be in Form WIN 4 and shall contain information date which shall not be more than 30 days prior to the date of filling the petition or filling the objection as applicable and the statement be made in duplicate, by an affidavit, concurrence of the statement of affairs shall be in Form WIN 5. Directions for Filing Statement of Affairs. 274. (1) Where a petition for winding up is filed before the Tribunal by any person other than the company, the Tribunal shall, if satisfied that a prima facie case for winding up of the company is made out, by an order direct the company to file its objections along with a statement of its affairs within 30 days of the order in such form and in such manner as may be prescribed: Provided that the Tribunal may allow a further period of 30 days in a situation of contingency or special circumstances: Provided further that the Tribunal may direct the petitioner to deposit such security for costs as it may consider reasonable as a precondition to issue directions to the company. (2) A company, which fails to file the statement of affairs as referred to in sub-section (1), shall forfeit the right to oppose the petition and such directors and officers of the company as found responsible for such non-compliance, shall be liable for punishment under sub- section (4). (3) The directors and other officers of the company, in respect of which an order for winding up is passed by the Tribunal under clause (d) of sub-section (1) of section 273, shall, within a period of thirty days of such order, submit, at the cost of the company, the books of account of the company completed and audited up to the date of the order, to such liquidator and in the manner specified by the Tribunal. (4) If any director or officer of the company contravenes the provisions of this section, the director or the officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than Rs. 25,000/- but which may extend to Rs. 5 Lakhs, or with both. (5) The complaint may be filed in this behalf before the Special Court by ROC, provisional liquidator, CL or any person authorised by the Tribunal. sub-section sub-section (4) (1) of of up to the of affairs duly affidavit shall verified and of

Company Appointments. 275. (1) For the purposes of winding up of a company by the Tribunal, the Tribunal at the time of the passing of the order of winding up, shall appoint an OL or a liquidator from the panel maintained under sub-section (2) as the CL. (2) The provisional liquidator or the CL, as the case may, shall be appointed by the Tribunal from insolvency professionals registered under the IBC, 2016; (3) Where a provisional liquidator is appointed by the Tribunal, the Tribunal may limit and restrict his powers by the order appointing him or it or by a subsequent order, but otherwise he shall have the same powers as a liquidator. (4) [Omitted] Liquidators and Their 13. Applicability.- Unless specified otherwise, the rules hereinafter shall apply to all types of liquidators. 14. Appointment of provisional liquidator or Company Liquidator.- (1) Tribunal may appoint a provisional liquidator of the company, pending final orders on the winding up petition, and where the company is not the applicant, notice of the application for appointment of provisional liquidator shall be given to the company in Form WIN 7 and the company shall be given a reasonable opportunity to make its representation unless the Tribunal, for reasons to be recorded in writing, dispenses with such notice. (2) The order appointing the PL shall set out the restrictions and limitations and shall be in Form WIN 8, with such variations as may be necessary. amongst the (3) The order shall also state that it will be the duty of every person, who is in possession of any property, books or papers, cash or any other assets of the company, to surrender such property, books or papers, cash or other assets, as the case may be, to the provisional liquidator. (4) Where an order for the appointment of provisional liquidator or CL has been made, the Registrar shall within a period not exceeding 7 days, send intimation to the CL or provisional liquidator in Form WIN 9 and a copy of the order for the appointment of provisional liquidator or CL shall also be sent to the ROC together with a copy of the petition and the affidavit filed in support thereof.

Company Liquidators and Their Appointments. (5) The terms and conditions of appointment of a provisional liquidator or Company Liquidator and the fee payable to him or it shall be specified by the Tribunal on the basis of task required to be performed, experience, liquidator and size of the company. (6) On appointment as provisional liquidator or Company Liquidator, as the case may be, such liquidator shall file a declaration within seven days from the date of appointment in the prescribed form disclosing conflict of interest or lack of independence in respect of his appointment, if any, with the Tribunal and such obligation shall continue throughout the term of his appointment. (7) While passing a winding up order, the Tribunal may appoint a provisional liquidator, if any, appointed under clause (1)of section 273, as the Company Liquidator for the conduct of the proceedings for the winding up of the company. (5) The PL or the CL appointed by the Tribunal shall file a declaration in Form WIN 10 disclosing conflict of interest or lack of independence, with the Tribunal within 7 days from the date of appointment. (6) The provisional liquidator or the CL shall be appointed by the Tribunal from amongst the insolvency professionals registered under the IBC unless the official liquidator is appointed. 15. Rules applicable to PL.- The rules relating to CL shall apply to PL, subject to such directions as the Tribunal may give in each case. 16. Costs, etc., of PL.- All the costs, charges and expenses incurred by the PL shall be paid out of the assets of the company and if the company does not have sufficient assets or any assets to pay the costs, charges and expenses, the Tribunal may make appropriate orders in this regard. 21. Declaration by CL.- The declaration by the CL regarding disclosing conflict of interest or lack of independence In respect of his appointment shall be filed In Form WIN 10 with the Tribunal. qualification of such (c)of sub-section

Removal and Replacement of Liquidator. 276. (1) The Tribunal may, on a reasonable cause being shown and for reasons to be recorded in writing, remove the provisional liquidator or the Company Liquidator, as the case may be, as liquidator of the company on any of the following grounds, namely: (a) misconduct (b)fraud or misfeasance; (c) professional incompetence or failure to exercise due care and diligence in performance of the powers and functions; (d) inability to act as provisional liquidator or as the case may be, Company Liquidator; (e) conflict of interest or lack of independence during the term of his appointment that would justify removal. (2) In the event of death, resignation or removal of the PL or CL, the Tribunal may transfer the work assigned to him or it to another CL for reasons to be recorded in writing. (3) Where the Tribunal is of the opinion that any liquidator is responsible for causing any loss or damage to the company due to fraud or misfeasance or failure to exercise due care and diligence in the performance of his or its powers and functions, the Tribunal may recover or cause to be recovered such loss or damage from the liquidator and pass such other orders as it may think fit. (4) The Tribunal shall, before passing any order under this section, provide a reasonable opportunity of being heard to the PL or CL.

Intimation to CL, PL and ROC 277. (1)Where appointment of PL or for the winding up, it shall, within 7 days, cause intimation thereof to be sent to the CL or PL and ROC. (2)On receipt of the copy of order of appointment of PL or winding up order, the ROC shall make an endorsement to that effect in his records relating to the company and notify in the Official Gazette that such an order has been made and in the case of a listed company, the Registrar shall intimate about such appointment or order, as the case may be, to the stock exchange or exchanges where the securities of the company are listed. (3) The winding up order shall be deemed to be a notice of discharge to the officers, employees and workmen of the company, except when the business of the company is continued. (4) Within 3 weeks from the date of passing of winding up order, the CL shall make an application to the Tribunal for constitution of a winding up committee to assist and monitor the progress of liquidation proceedings by the CL in carrying out the function as provided in sub-section (5) and such winding up committee shall comprise of the following persons, namely: (i) Official Liquidator; (ii) nominee of secured creditors; and (iii) a professional nominated by the Tribunal. WINDING UP ORDER the Tribunal makes an order for 17. Order to be sent to liquidator and form of order.- (1) The order for winding up shall be in Form WIN 11 and the order for winding-up shall be sent by the Registrar after it is signed and sealed within 7 days from the date of receipt of the order by the Registrar, to the CL and the ROC in Form WIN 12 and Form WIN 13, along with a copy of the petition and the affidavit filed in support thereof if not already sent at the time of appointment of the PL. (2) The CL shall cause a sealed copy of the order to be served upon the company in accordance with the provisions of section 20, at its registered office or if there is no registered office, at its principal or last known principal place of business, or upon such other person or persons or in such manner as the Tribunal may direct. (3) A copy of the order made by the Tribunal shall also be filed by the liquidator within 30 days of the receipt with the Registrar of Companies in form INC-28 of the Companies (Incorporation) Rules, 2014. 18. Contents of winding up order.- An order for winding up a company shall inter-alia contain that it will be the duty of such of the persons as are liable to submit the books of account of the company completed and audited upto the date of the order, to attend on the CL at required time and place and give him all the information, and it will be the duty of every person who is in possession of any property, books or papers, cash or any other assets of the company, including the benefits derived therefrom, to surrender forthwith such property, books or papers, cash or other assets and the benefits so derived, as the case may be, to the Company Liquidator. 19. Directions on making winding up order.- At the time of making the winding up order, the Tribunal shall give directions to the petitioner as to the advertisement of the order and the persons, if any, on whom the order shall be served.

Intimation to Company Liquidator, Provisional Liquidator and Registrar. Contd . (5) The CL shall be the convener of the meetings of the winding up committee which shall assist and monitor the liquidation proceedings in following areas of liquidation functions, namely: (i) taking over assets; (ii) examination of the statement of affairs; (iii) recovery of property, cash or any other assets of the company including benefits derived therefrom; (iv) review of audit reports and accounts of the company; (v)sale of assets; (vi) finalisation of list of creditors and contributories; (vii) compromise, abandonment and settlement of claims; (viii) payment of dividends, if any; and (ix) any other function, as the Tribunal may direct from time to time. (6) The CL shall place before the Tribunal a report along with minutes of the meetings of the committee on monthly basis duly signed by the members present in the meeting for consideration till the final report for dissolution of the company is submitted before the Tribunal. (7) The CL shall prepare the draft final report for consideration and approval of the winding up committee. (8) The final report so approved by the winding up committee shall be submitted by the CL before the Tribunal for passing of a dissolution order in respect of the company. 20. Advertisement of order.- The order for the winding up of a company by the Tribunal shall, within 14 days of the date of the order, be advertised by the petitioner in a newspaper in English and a newspaper in vernacular circulating in the State where the registered office of the company is situated and shall be served by the petitioner upon such person, if any, and in such manner as the Tribunal may direct, and the advertisement shall be in Form WIN 14. 23. Form of proceedings after winding up order is made.- After a winding up order is made or a PL is appointed, every subsequent proceeding in the winding up shall bear the original number of the winding up petition besides its own distinctive number, but against the name of the company in the cause-title, the words 'in liquidation' or 'in provisional liquidation' as the case may be, shall appear in brackets. language widely

278. The order for the winding up of a company shall operate in favour of all the creditors contributories of the company as if it had been made out on the joint petition of contributories. and all creditors and

Stay of Suits, etc., on Winding up Order. 279. (1) When a winding up order has been passed or a provisional liquidator has been appointed, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, by or against the company, except with the leave of the Tribunal and subject to such terms as the Tribunal may impose: Provided that any application to the Tribunal seeking section shall be disposed of by the Tribunal within sixty days. (2) Nothing in sub-section (1)shall apply to any proceeding pending in appeal before the Supreme Court or a High Court. APPLICATION FOR STAY OF SUITS ETC. ON WINDING UP ORDER 24. commence or proceeding.- An application under sub-section (1) of section 279 for leave of the Tribunal to commence or continue any suit or other legal proceeding by company shall Form WIN notice to the Company Liquidator and the parties to the suit or proceeding be commenced or continued. Application for continue leave to or suit or against made 15 the in be leave under this upon sought to

Jurisdiction of Tribunal. 280. The Tribunal shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of, (a) any suit or proceeding by or against the company; (b) any claim made by or against the company, including claims by or against any of its branches in India; (c) any application made under section 233 (Merger or Amalgamation of Certain Companies); (d) any question of priorities or any other question whatsoever, whether of law or facts, including those relating to assets, business, entitlements, privileges, responsibilities, obligations or in any matter arising out of, or in relation to winding up of the company, whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made or such scheme has been submitted, or is submitted, before or after the order for the winding up of the company is made. actions, benefits, rights, duties,

Submission of Report by Company Liquidator. REPORTS BY COMPANY LIQUIDATOR UNDER SECTION 281 281. (1) Where the Tribunal has made a winding up order or appointed a Company Liquidator, such liquidator shall, within 60 days from the order, submit to the Tribunal, a report containing the following particulars, namely: (a) the nature and details of the assets of the company including their location and value, stating separately the cash balance in hand and in the bank, if any, and the negotiable securities, if any, held by the company: Provided that the valuation of the assets shall be obtained from registered valuers for this purpose; (b) amount of capital issued, subscribed and paid-up; (c) the existing and contingent liabilities of the company including names, addresses and occupations of its creditors, stating separately the amount of secured and unsecured debts, and in the case of secured debts, particulars of the securities given, whether by the company or an officer thereof, their value and the dates on which they were given; (d) the debts due to the company and the names, addresses and occupations of the persons from whom they are due and the amount likely to be realised on account thereof; (e) guarantees, if any, extended by the company; (f) list of contributories and dues, if any, payable by them and details of any unpaid call; (g) details of trade marks and intellectual properties, if any, owned by the company; 25. Report by CompanyLiquidator.- (1) The report to be submitted by the Company Liquidator under sub- section (1) of section 281 shall be in Form WIN 16 (2) It shall be the duty of promoters, directors, officers, employees and every person who has made or concurred in making of the statement of affairs, to attend on the Company Liquidator and answer all such questions as may be put to him, give all such further information and provide assistance (3) The Tribunal shall, within 7 days from the receipt of such report, fix a date for the consideration thereof by the Tribunal and notify the date on the notice board of the Tribunal and to the Company Liquidator. 26. Inspection of statementof affairs and report.- Every creditor or contributory, by himself, or by his agent, shall be entitled to inspect the statement of Company Liquidator submitted under sub-rule (1) of rule 25, on payment of a fee of Rs. 1,000/- and to obtain copies thereof or extracts therefrom on payment of a fee of Rs. 5/- per page. affairs and the report of the 27. Considerationof report by Tribunal.- The consideration of the report made by the Company Liquidator pursuant to section 281, shall be placed before the Tribunal, and the Company Liquidator shall personally or by authorised representative attend the consideration of the said report and give the Tribunal any further information or explanation with reference to the matters contained therein which the Tribunal may require and on consideration of the aforesaid report, the Tribunal may pass such orders and give such directions as it may think fit.

Submission of Report by Company Liquidator. Contd. 28. Provisional list of contributories.- (1) Unless the Tribunal dispenses with the settlement of a list of contributories, the Company Liquidator shall prepare and file in the Tribunal not later than 21 days after the date of the winding up order, a provisional list of contributories of the company with their names and addresses, the number of shares or the extent of interest to be attributed to each contributory, the amount called up and the amount paid up in respect of such shares or interest, and distinguishing in such list the several classes of contributories. (h) details of subsisting contracts, joint ventures and collaborations, if any; (i) details of holding and subsidiary companies, if any; (j) details of legal cases filed by or against the company; and (k) any other information which the Tribunal may direct or the Company Liquidator may consider necessary to include. (2) The Company Liquidator shall include in his report the manner in which the company was promoted or formed and whether in his opinion any fraud has been committed by any person in its promotion or formation or by any officer of the company in relation to the company since the formation thereof and any other matters which, in his opinion, it is desirable to bring to the notice of the Tribunal. (3) The Company Liquidator shall also make a report on the viability of the business of the company or the steps which, in his opinion, are necessary for maximising the value of the assets of the company. (4) The Company Liquidator may also, if he thinks fit, make any further report or reports. (5) Any person describing himself in writing to be a creditor or a contributory of the company shall be entitled by himself or by his agent at all reasonable times to inspect the report submitted in accordance with this section and take copies thereof or extracts therefrom on payment of the prescribed fees. (2) The list shall consist of every person who was a member of the company at the commencement of the winding up or his representative, and shall be divided into two parts, the first part consisting of those who are contributories in their own right, and the second part, of those who are contributories as being representatives of, or liable for the debts of others, as required under sub-section (1) of section 281, and the list shall be in Form WIN 17. 29. Notice to be given of date of settlement.- (1) Upon the filing of the provisional list of contributories mentioned in rule 28, the Company Liquidator shall obtain a date from the Tribunal for settlement of the list of contributories and shall give notice of the date appointed to every person included in such list, stating in such notice in what character and for what number of shares or extent of interest such person is included in the list, the amount called up and the amount paid up in respect of such shares or interest, and informing such person by such notice that if he intends to object to his being settled as a contributory in such character and for such number of shares or interest as mentioned in the list, he should file in Tribunal his affidavit in support of his contention and serve a copy of the same on the Company Liquidator not less than two days before the date fixed for the settlement, and appear before Tribunal on the date appointed for the settlement in person or by authorised representative and such notice shall be in Form WIN 18, and shall be sent in the mode set out in section 20 so that it reaches the contributories not less than fourteen days before the date fixed for the settlement. (2) The person who posted the notice shall swear by an affidavit in Form WIN 19 relating to the dispatch thereof, and file the same in the Tribunal not later than two days before the date fixed for the settlement of the list.

Directions of Tribunal on Report of Company Liquidator. 282. (1)The Tribunal shall, on consideration of the report of the Company Liquidator, fix a time limit within which the entire proceedings shall be completed and the company be dissolved: Provided that the Tribunal may, if it is of the opinion, at any stage of the proceedings, or on examination of the reports submitted to it by the Company Liquidator and after hearing the Company Liquidator, creditors or contributories or any other interested person, that it will not be advantageous or economical to continue the proceedings, revise the time limit within which the entire proceedings shall be completed and the company be dissolved. (2) The Tribunal may, on examination of the reports submitted to it by the Company Liquidator and after hearing the Company Liquidator, creditors or contributories or any other interested person, order sale of the company as a going concern or its assets or part thereof: Provided that the Tribunal may, where it considers fit, appoint a sale committee comprising such creditors, promoters and officers of the company as the Tribunal may decide to assist the Company Liquidator in sale under this sub- section. (3)Where a report is received from the Company Liquidator or the Central Government or any person that a fraud has been committed in respect of the company, the Tribunal shall, without prejudice to the process of winding up, order for investigation under section 210, and on consideration of the report of such investigation it may pass order and give directions under sections 339 to 342 or direct the Company Liquidator to file a criminal complaint against persons who were involved in the commission of fraud. (4) The Tribunal may order for taking such steps and measures, as may be necessary, to protect, preserve or enhance the value of the assets of the company. (5)The Tribunal may pass such other order or give such other directions as it considers fit.

Custody of Company's Properties. 283. (1) Where a winding up order has been made or where a provisional liquidator has been appointed, the Company Liquidator or the provisional liquidator, as the case may be, shall, on the order of the Tribunal, forthwith take into his or its custody or control all the property, effects and actionable claims to which the company is or appears to be entitled to and take such steps and measures, as may be necessary, to protect and preserve the properties of the company. (2) Notwithstanding anything contained in sub-section (1), all the property and effects of the company shall be deemed to be in the custody of the Tribunal from the date of the order for the winding up of the company. (3) On an application by the Company Liquidator or otherwise, the Tribunal may, at any time after the making of a winding up order, require any contributory for the time being on the list of contributories, and any trustee, receiver, banker, agent, officer or other employee of the company, to pay, deliver, surrender or transfer forthwith, or within such time as the Tribunal directs, to the Company Liquidator, any money, property or books and papers in his custody or under his control to which the company is or appears to be entitled. 22. Company Liquidator to take charge of assets and books and papers of company.- (1) On a winding up order being made, the Company Liquidator shall, forthwith take into his custody or under his control all the properties and effects, actionable claims and the books and papers of the company, and it shall be the duty of all persons having custody of any of the properties, books and papers, cash or any other assets of the company, to deliver possession thereof to the Company Liquidator. (2) Where the company, its promoters, its key managerial personnel or any other person required to cooperate with the liquidator do not so cooperate, the liquidator may make an application to the Tribunal for an appropriate order. (3) The Tribunal, on receiving an application under sub- rule (2), shall by an order, direct such promoters, key managerial personnel or other contractual counter party, supplier, service provider or auditor) - (a) to provide the information requested by the liquidator; and (b) to comply with the instructions of the liquidator and to cooperate with him in collection of information and taking custody of the assets, properties and books of accounts. person (including

Promoters, Directors, etc., to Cooperate with Company Liquidator. 284. (1) The promoters, directors, officers and employees, who are or have been in employment of the company or acting or associated with the company shall extend full cooperation to the Company Liquidator in discharge of his functions and duties. (2) Where any person, without reasonable cause, fails to discharge his obligations under sub-section (1), he shall be punishable with imprisonment which may extend to 6 months or with fine which may extend to Rs. 50,000/, or with both.

Settlement of List of Contributories and Application of Assets. 285. (1)As soon as may be after the passing of a winding up order by the Tribunal, the Tribunal shall settle a list of contributories, cause rectification of register of members in all cases where rectification is required in pursuance of this Act and shall cause the assets of the company to be applied for the discharge of its liability: Provided that where it appears to the Tribunal that it would not be necessary to make calls on or adjust the rights of contributories, the Tribunal may dispense with the settlement of a list of contributories. (2) In settling the list of contributories, the Tribunal shall distinguish between those who are contributories in their own right and those who are contributories as being representatives of, or liable for the debts of, others. (3) While settling the list of contributories, the Tribunal shall include every person, who is or has been a member, who shall be liable to contribute to the assets of the company an amount sufficient for payment of the debts and liabilities and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, subject to the following conditions, namely: 30. Settlement of list.- On the date appointed for the settlement of the list referred to in rule 29, the Tribunal shall hear any person who objects to being settled as a contributory or as a contributory in such character or for such number of shares or extent of interest as is mentioned in the said list, and after such hearing, shall finally settle the and the aforesaid list when settled shall be certified by the Tribunal under its seal and shall be in Form WIN 20. 31. Notice of settlement to contributories.- (1) Upon the receipt of the settled list of contributories, as certified by the Tribunal in terms of rule 30, the CL shall within a period of 7 days issue notice to every person on the list of contributories, stating in what character and for what number of shares or interest he has been placed on the list, what amount has been called up and amount paid up in respect of such shares or interest and in the notice he shall inform such person that any application for the removal of his name from the list or for variation of the said list, must be made to the Tribunal within 15 days from the date of service of notice, in Form WIN 21. (2) An affidavit of service by the person, who dispatched the notice, shall be filed in Tribunal within 7 days in Form WIN 22. 32. Supplemental list of contributories.- The Tribunal may add to the list of contributories by a supplemental list or lists.

Settlement of List of Contributories and Application of Assets. Contd 33. Variation of list.- Save as provided in rule 31, the list of contributories shall not be varied, and no person settled on the list as a contributory shall be removed from the list, or his liability in any way varied, except by order of the Tribunal and in accordance with such order. (a) a person who has been a member shall not be liable to contribute if he has ceased to be a member for the preceding one year or more before the commencement of the winding up; (b) a person who has been a member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member; (c) no person who has been a member shall be liable to contribute unless it appears to the Tribunal that the present members are unable to satisfy the contributions required to be made by them in pursuance of this Act; (d)in the case of a company limited by shares, no contribution shall be required from any person, who is or has been a member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as such member; (e) in the case of a company limited by guarantee, no contribution shall be required from any person, who is or has been a member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up but if the company has a share capital, such member shall be liable to contribute to the extent of any sum unpaid on any shares held by him as if the company were a company limited by shares. 34. Application for rectification of list.- If after the settlement of the list , the CL has reason to believe that a contributory who had been included in the provisional list has been improperly or by mistake excluded or omitted or that the character in which or the number of shares or extent of interest for which he has been included in the list as finally settled or any other particular requires rectification, he may, contributory concerned, apply to the Tribunal for such rectification and the Tribunal may rectify or vary the list as it may think fit. contained upon notice to the therein, 35. List of contributories consisting of past members.- It shall not be necessary to settle a list of contributories consisting of the past members of a company, unless so ordered by the Tribunal and where an order is made for settling a list of contributories consisting of the past members of a company, the provisions of these rules shall apply to the settlement of such list in the same manner as for the present members.

DEBTS AND CLAIMS AGAINST COMPANY 100. Notice for proving debts.- (1) Subject to the provisions of the Act and directions of the Tribunal, the CL in a winding up by the Tribunal shall, within a period of 30 days from the date of order of winding up, fix a certain day, and give a notice of 14 days thereof (i) by advertisement in Form No. WIN 43 in one issue of a daily newspaper In the English language and one issue of a daily newspaper In the regional language widely circulating in the State or Union territory where the registered office is situated concerned to the creditors of the company to prove their debts or claims and to establish any title they may have to priority under section 326 or 327, or to be excluded from the benefit of any distribution made before such debts or claims are proved, or, as the case may be, from objecting to such distribution; (ii) by such mode of communication as is permitted under section 20 to every person mentioned in the statement of affairs, as a creditor, who has not proved his debt and to every person mentioned in the statement of affairs as a preferential creditor, whose claim to be a preferential creditor has not been established or is not admitted, or where there is no statement of affairs, to the creditors as ascertained from the books of the company and, to each person who, to the knowledge of the CL, claims to be a creditor or preferential creditor of the company and whose claim has not been admitted, to the last known address or place of residence of such person. (2) All the rules hereinafter set out as to the admission or rejection of proofs shall apply with necessary variations to any claim to priority as a preferential creditor. 101. Proof of debt.- (1) In a winding up by the Tribunal, every creditor shall, subject as hereinafter provided, prove his debt, unless the Tribunal in any particular case directs that any creditors or class of creditors shall be admitted without proof. (2) Formal proof of the debts mentioned in clause (d) of sub-section (1) of section 327 shall not be required, unless the CL in any special case otherwise directs.

102. Mode of proof and verification thereof.- A debt may be proved by delivering or sending to the CL by such mode as set out in section 20, an affidavit verifying the debt made by the creditor or by some person authorised by him and if the affidavit is made by a person authorised by the creditor, it shall state the authority and means of knowledge of the deponent and a creditor need not attend upon the examination unless required so to do by the CL. 103. Contents of proof.- An affidavit proving a debt shall contain or refer to a statement of account showing the particulars of the debt, and shall specify the vouchers, if any, by which the same can be substantiated and the affidavit shall state whether the creditor is a secured creditor, or a preferential creditor, and if so, shall set out the particulars of the security or of the preferential claims, and the affidavit shall be in Form WIN 44. 104. Workmen's dues.- In any case where there are numerous claims for wages or any accrued remuneration by workmen and others employed by the company, it shall be sufficient if one proof in Form WIN 45 for all such claims is made either by a foreman or some other person on behalf of all such creditors and such proof shall be annexed thereto as forming part thereof, setting forth the names of the workmen and others and the amounts severally due to them in the schedule in the said form, and any proof made in compliance with this rule shall have the same effect as if separate proofs had been made by each of the said workmen and others. 105 Production of bills of exchange and promissory notes.- Where a creditor seeks to prove in respect of a bill of exchange, promissory note or other negotiable instrument or security of a like nature on which the company is liable, such bill of exchange, note, instrument or security shall be produced before the CL and be marked by him before the proof is admitted.

106. Value of debts.- The value of all debts and claims against the company shall, as far as is possible, be estimated according to the value thereof at the date of the appointment of the Provisional Liquidator or the order of the winding up of the company, whichever is earlier: Provided that where before the presentation of the petition for winding up, a resolution has been passed by the company for winding up, the date for estimation of debts and claims shall be the date of the passing of such resolution. 107. Discount.- A creditor proving his debt shall deduct therefrom all trade discounts, if any. 108. Interest.- On any debt or certain sum payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the winding up order, or the resolution, as the case may be, the creditor may prove for interest at a rate not exceeding 6% per annum or as decided by the Tribunal up to that date from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made, giving notice that interest will be claimed from the date of demand until the time of payment. 109. Periodical payments.- When any rent or other payment fa1ls due at the time referred to in rule 108, and the order or resolution to wind up is made at any time other than one of those times mentioned in rule 108, the persons shall be entitled to the rent or payments for a proportionate part thereof up to the date of winding up order or resolution accrued due from day to day: Provided that where the CL remains in occupation of the premises demised to a company which is being wound up, nothing in this rule shall prejudice or affect the right of the landlord of such premises to claim payment by the company, or the liquidator, of rent during the period of the company's or liquidator's occupation.

.110. Proof of debt payable at future time.- A creditor may prove for a debt not payable at the date of the winding up order, as if it were payable presently, and may receive dividends equally with the other creditors, deducting only thereat a rebate of interest at the rate of 6% p.a. computed from the date of declaration of the dividend to the time when the debt would have become payable according to the terms on which it was contracted. 111. Examination of proof.- The CL shall, as soon as possible but not later than 30 days or within such time as may be allowed by the Tribunal on an application by the liquidator, examine every proof of debt lodged with him and the grounds of the debt and he may call for the production of the documentary proof if any referred to in the affidavit of proof or require further evidence in support of the debt, and if he requires further evidence, or requires that the creditor should attend the investigation in person, he shall fix a day and time at which the creditor is required to attend or to produce further evidence and send a notice to such creditor in Form WIN 46 by pre-paid registered post or speed post so as to reach him not later than 7 days before the date fixed. 112. CL's right to call any person in connection with investigation.- The CL may call upon any person whom he may deem capable of giving information respecting the debts to be proved in liquidation and may require such person to produce any documents in his custody or power relating to such debts and shall tender with the call such sum as appears to the CL sufficient to defray the traveling and other expenses of the person called for attendance and where the person so called fails without lawful excuse to attend or produce any documents in compliance with the call or avoids or evades service, the CL may report the same to the Tribunal and apply for appropriate orders, and the Tribunal may pass any order as it may think fit. 113. Affidavit.- For the purpose of his duties, in relation to the admission of proof of debts, where applicable, the CL may take affidavits and the CL may at his discretion dispense with this requirement and he may also permit the taking of an affidavit or undertaking in lieu of an oath.

114. Costs of proof.- Unless otherwise ordered by the Tribunal, a creditor shall bear the costs of proving his debt. 115.Acceptance or rejection of proof to be communicated.- As soon as possible, but not later than 14 days, from the date of conclusion of the examination referred to in rule 111, the CL shall, in writing admit or reject the proof in whole or in part, every decision of the liquidator accepting or rejecting a proof, either wholly or in part, shall be communicated to the creditor concerned by means permitted under section 20 when the proof is accepted or rejected, provided that it shall not be necessary to give notice of the admission of a claim to a creditor who has appeared before the liquidator and the acceptance of whose claim has been communicated to him or his agent in writing at the time of acceptance and where the liquidator rejects a proof, wholly or in part, he shall state the grounds of the rejection to the creditor in Form WIN 47, and notice of admission of proof shall be in Form WIN 48. 116. Appeal by creditor.- (1) If a creditor is dissatisfied with the decision of the CL in respect of his proof, the creditor may, not later than 21 days from the date of service of the notice upon him of the decision of the liquidator, appeal to the Tribunal against the decision. (2) The appeal shall be made in Form WIN 49, supported by an affidavit which shall set out the grounds of such appeal, and notice of the appeal shall be given to the CL and on such appeal, the Tribunal shall have all the powers of an appellate court under the Code of Civil Procedure, 1908 (5 of 1908). 117. Procedure where creditor appeals.- (1) The CL shall, upon receiving notice of the appeal against a decision rejecting a proof wholly or in part, file with the Registry such proof with the order containing the grounds of rejection. (2) It shall be open to any creditor or contributory to apply to the Tribunal for leave to intervene in the appeal, and the Tribunal may, if it thinks fit, grant the leave subject to such terms and conditions as may be just, and where such leave has been granted, notice of the hearing of the appeal shall be given to such creditor or contributory.

118. CL not to be personally liable for costs.- The CL shall in no case be personally liable for costs in relation to an appeal from his decision rejecting any proof wholly or in part. 119. Proofs and list of creditors to be filed in Tribunal.- The CL shall, within 30 days from the date fixed for the submission of proofs under rule 100 or such further time as the Tribunal may allow, file in the Tribunal a list of the creditors, in Form WIN 50, who submitted to him proofs of their claims in pursuance of the advertisement and the notice referred to in rule 100, mentioning the amounts of debt for which they claimed to be creditors, distinguishing in such list the proofs admitted wholly, the proofs admitted or rejected in part, and the proofs wholly rejected, and the proofs, with the memorandum of admission or rejection of the same in whole or in part, as the case may be, endorsed thereon, shall be filed in Tribunal along with the certificate. 120. List of creditors not to be varied.- The list of creditors filed in Tribunal shall be the list of the creditors of the company, and shall not be added to or varied except under the order of the Tribunal and in accordance with such orders and where an order is made adding to or varying the list of creditors, the CL shall amend the list in accordance with such order. 121. Notice of filing list and inspection of same.- Upon the filing of the list of creditors as settled by the CL, the Registry shall notify the filing thereof on the Tribunal's notice board and on the website of the Tribunal, and the list of creditors as settled and the proofs relating thereto shall be open to the inspection of every creditor or contributory on payment of fee of Rs. 1,000/-. 122. Expunging of proof.- (1) If after the admission of a proof, the CL has reason to believe that the proof has been improperly admitted or admitted by a mistake, he may immediately apply to the Tribunal upon notice to the creditor who made the proof, to expunge the proof or reduce its amount, as the case may be.

123. Procedure on failure to prove debt within time fixed.- If any creditor fails to file proof of his debt with the CL within the time specified in the advertisement referred to in rule 100, such creditor may apply to the Tribunal for relief within 15 days from the time specified in such advertisement, and the Tribunal may, thereupon, adjudicate upon the debt or direct the liquidator to do so. 124. Right of creditor who has not proved debt before declaration of dividend.- Any creditor who has not proved his debt before the declaration of any dividend or dividends shall be entitled to be paid out of any money for the time being in the hands of the CL available for distribution of dividend, any dividend or dividends which such creditor may have failed to receive before that money is applied to the payment of any future dividend or dividends, but he shall not be entitled to disturb the distribution of any dividend declared before his debt was proved by reason that he has not participated therein. 125. Payment of subsequent interest.- In the event of there being a surplus after payment in full of all the claims admitted to proof, creditors whose proofs have been admitted shall be paid interest from the date of the winding up order or of the resolution, as the case may be, up to the date of the declaration of the final dividend, at a rate not exceeding 6% p.a. or such other rate as may be decided by the Tribunal, on the admitted amount of the claim, after adjusting against the said amount the dividends declared as on the date of the declaration of each dividend.

Obligations of Directors and Managers. 286. In the case of a limited company, any person who is or has been a director or manager, whose liability is unlimited under the provisions of this Act, shall, in addition to his liability, if any, to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of winding up, a member of an unlimited company: Provided that (a) a person who has been a director or manager shall not be liable to make such further contribution, if he has ceased to hold office for a year or upwards before the commencement of the winding up; (b) a person who has been a director or manager shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office; (c) subject to the articles of the company, a director or manager shall not be liable to make such further contribution unless the Tribunal deems it necessary to require the contribution in order to satisfy the debts and liabilities of the company, and the costs, charges and expenses of the winding up.

Advisory Committee 287. (1) The Tribunal may, while passing an order of winding up of a company, direct that there shall be, an advisory committee to advise the Company Liquidator and to report to the Tribunal on such matters as the Tribunal may direct. (2) The advisory committee appointed by the Tribunal shall consist of not more than twelve members, being creditors and contributories of the company or such other persons in such proportion as the Tribunal may, keeping in view the circumstances of the company under liquidation, direct. (3) The Company Liquidator shall convene a meeting of creditors and contributories, as ascertained from the books and documents, of the company within thirty days from the date of order of winding up for enabling the Tribunal to determine the persons who may be members of the advisory committee. (4) The advisory committee shall have the right to inspect the books of account and other documents, assets and properties of the company under liquidation at a reasonable time. (5) The provisions relating to the convening of the meetings, the procedure to be followed thereat and other matters relating to conduct of business by the advisory committee shall be such as may be prescribed. (6) The meeting of advisory committee shall be chaired by the Company Liquidator. 36. Meeting of creditors and contributories.- The meeting of the creditors and contributories in accordance with the provisions of subsection (3) of section 287 to determine the persons who may be the members of the advisory committee, shall be convened, held and conducted in the manner hereinafter provided in these rules for the holding and conducting of meeting of creditors and contributories. 37. CL to report result of meeting.- (1) Within 7 days after the meeting, the CL shall report result to the Tribunal in Form WIN 23. (2) Where the creditors and contributories have agreed upon the constitution and composition of the AC and the persons who are to be members thereof, an AC shall be constituted in accordance with such decision, and the CL shall set out in his report the names of the members of the committee so constituted. (3) If creditors and contributories have not agreed upon the composition of the AC and the persons who are to be members thereof, the CL shall apply to the Tribunal for directions, which shall fix a date for the consideration of the report of the CL and the notice of the date shall be advertised by the CL in such manner as the Tribunal shall direct; 7 days before the date so fixed in Form WIN 24. (4) On the date fixed for hearing, the Tribunal may, after hearing the CL and any creditor or contributory who may appear, decide as to who would be the members of the said AC or pass such orders or give such directions in the matter, as the Tribunal may think fit.

Advisory Committee Contd. 38. Filling -up of vacancy in AC.- (1) On a vacancy occurring in the AC, the CL shall summon a meeting of creditors or of contributories, as the case may require, to recommend for filling the vacancy and the meeting may, by resolution, recommend for re-appointing the same, or propose for appointing another creditor or contributory, as the case may to fill the vacancy: Provided that if the CL is of the opinion that it is unnecessary for the vacancy to be filled, he may apply to the Tribunal and the Tribunal may make an order in this regard. (2) The continuing members of the AC, if not less than two, may act notwithstanding any vacancy in the said committee. (3) Where the creditors or contributories, as the case may be, fail to fill the vacancy for whatever reason, the CL shall forthwith report such failure to the Tribunal and Tribunal may, by order, fill such vacancy. 39. CL and members of AC dealing with company's assets.- Neither the CL nor any member of the AC shall, while acting as such liquidator or member of such committee in any winding up, either directly or indirectly, by himself or through his employer, partner, clerk, agent, servant, or relative, become purchaser of any part of the company's assets, except by leave of the Tribunal and any such purchase made contrary to the provisions of this rule may be set aside by the Tribunal on the application of the said liquidator or of a creditor or contributory, as the case may be, and the Tribunal may make such order as to costs as it may think fit.

Submission of Periodical Reports to Tribunal. 288. (1)The CL shall make periodical reports to the Tribunal and in any case make a report at the end of each quarter with respect to the progress of the winding up of the company in such form and manner as may be prescribed. (2)The Tribunal application by the CL, review the orders made by it and make such modifications as it thinks fit. 76. Submission of periodical reports to the tribunal.- The CL shall make quarterly reports, referred to in sub-section (1) of section 288, to the Tribunal in Form WIN 37 with respect to the progress of winding up of the company. may, on an

Power of Tribunal on Application for Stay of Winding Up. 289. Omitted

ATTENDANCE AND APPEARANCE OF CREDITORS AND CONTRIBUTORIES Powers and Duties of Company Liquidator. 290. (1) Subject to directions by the Tribunal, if any, in this regard, the Company Liquidator, in a winding up of a company by the Tribunal, shall have the power (a) to carry on the business of the company so far as may be necessary for the beneficial winding up of the company; (b) to do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose, to use, when necessary, the company s seal; (c) to sell the immovable and movable property and actionable claims of the company by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels; (d) to sell the whole of the undertaking of the company as a going concern; (e) to raise any money required on the security of the assets of the company; (f) to institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in the name and on behalf of the company; (g) to invite and settle claim of creditors, employees or any other claimant and distribute sale proceeds in accordance with priorities established under this Act; (h) to inspect the records and returns of the company on the files of the Registrar or any other authority; (i) to prove rank and claim in the insolvency of any contributory for any balance against his estate, and to receive dividends in the insolvency, in respect of that balance, as a separate debt due from the insolvent, and rateably with the other separate creditors; (j) to draw, accept, make and endorse any negotiable instruments including cheque, bill of exchange, hundi or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if such instruments had been drawn, accepted, made or endorsed by or on behalf of the company in the course of its business; (k) to take out, in his official name, letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases, the money due shall, for the purpose of enabling the Company Liquidator to take out the letters of administration or recover the money, be deemed to be due to the Company Liquidator himself; (l) to obtain any professional assistance from any person or appoint any professional, in discharge of his duties, obligations and responsibilities and for protection of the assets of the company, appoint an agent to do any business which the Company Liquidator is unable to do himself; (m) to take all such actions, steps, or to sign, execute and verify any paper, deed, document, application, petition, affidavit, bond or instrument as may be necessary, (i) for winding up of the company; (ii) for distribution of assets; (iii) in discharge of his duties and obligations and functions as Company Liquidator; and (n) to apply to the Tribunal for such orders or directions as may be necessary for the winding up of the company. (2) The exercise of powers by the Company Liquidator under sub-section (1)shall be subject to the overall control of the Tribunal. (3) Notwithstanding the provisions of sub-section (1), the Company Liquidator shall perform such other duties as the Tribunal may specify in this behalf. 126. Attendance at proceedings.- (1) Save as otherwise provided by these rules or by an order of the Tribunal, every contributory and every creditor shall be at liberty at his own expense to attend the proceedings before the Tribunal or before the CL and shall be entitled upon payment of the costs occasioned thereby to have notice of all such proceedings as he shall, by request in writing addressed to the CL, desire to have notice of; but if the Tribunal shall be of opinion that the attendance of any such person has occasioned any additional costs which ought not to be borne by the funds of the company, it may direct such costs or a gross sum in lieu thereof to be paid by such person and such person shall not be entitled to attend any further proceedings until he had paid the same. (2) No contributory or creditor shall be entitled to attend any proceedings before the Tribunal, unless and until he or an authorised representative on his behalf has filed an appearance with the Registry and the Registry shall keep an "Appearance Book" in which all such appearances shall be entered. 127. Representation of creditors and contributories before Tribunal. The Tribunal may, if it thinks fit, appoint from time to time anyone or more of the creditors or contributories to represent before the Tribunal at the expense of the company, all or any class of creditors or contributories upon any question or in relation to any proceedings before the Tribunal, and may remove any person so appointed, if more than one person is appointed under this rule to represent one class, and the persons so appointed, shall employ the same authorised representative to represent them, and where they fail to agree as to the authorised representative to be employed, the Tribunal may nominate an authorised representative for them. COLLECTION AND DISTRIBUTION OF ASSETS IN WINDING UP BY TRIBUNAL 128. Powers of CL.- The duties imposed by sub-section (1) of section 290 with regard to the collection of the assets of the company and the application of the assets in discharge of the company's liabilities shall be discharged by the CL subject to the control of the Tribunal. 129. CL to be in position of receiver.- For the discharge by the CL of the duties imposed by sub-section (1) of section 290, the CL shall, for the purpose of acquiring and retaining possession of the property of the company, be in the same position as if he were a Receiver of the property appointed by the Tribunal, and the Tribunal may on his application enforce such acquisition or retention accordingly. 130. Company's property to be surrendered to CL on requisition.- Any contributory for the time being on the list of contributories, trustee, receiver, banker, agent, officer or other employee of a company which is being wound up under order of the Tribunal, shall on notice from the CL and within such time as he shall by notice require, pay, deliver, convey, surrender or transfer to or into the hands of the CL any money, property or books and papers in his custody or under his control to which the company is or appears to be entitled and where the person so required fails to comply with the notice, the CL may apply to the Tribunal for appropriate orders and the notice shall be in Form WIN 51.

Provision for Professional Assistance to Company Liquidator. 291. (1)The Company Liquidator may, with the sanction of the Tribunal, appoint one or more chartered accountants or company secretaries or cost accountants or legal practitioners or such other professionals on such terms and conditions, as may be necessary, to assist him in the performance of functions under this Act. (2) Any person appointed under this section shall disclose forthwith to the Tribunal in the prescribed form any conflict of interest independence in appointment. 77. Employment of additional or special staff by OL. Where the OL is of the opinion that the employment of additional staff is necessary in any liquidation, he shall apply to the Tribunal for sanction, and the Tribunal may sanction such staff as it thinks fit on such salaries and allowances as the Tribunal may deem appropriate. 78. Declaration by professional.- The professional, referred to in section 291, appointed by the CL with the sanction of the Tribunal shall file a declaration in Form WIN 38 disclosing any conflict of interest or lack of independence in appointment with forthwith. any special or his duties and or lack of of his respect respect the of Tribunal his

Exercise and Control of Company Liquidator's Powers. 292. (1) Subject to the provisions of this Act, the Company Liquidator shall, in the administration of the assets of the company and the distribution thereof among its creditors, have regard to any directions which may be given by the resolution of the creditors or contributories at any general meeting or by the advisory committee. (2) Any directions given by the creditors or contributories at any general meeting shall, in case of conflict, be deemed to override any directions given by the advisory committee. (3) The Company (a) may summon meetings of the creditors or contributories, whenever he thinks fit, for the purpose of ascertaining (b) shall summon such meetings at such times, as the creditors or contributories, as the case may be, may, by resolution, direct, or whenever requested in writing to do so by not less than one-tenth in value of the creditors or contributories, as the case may be. (4) Any person aggrieved by any act or decision of the Company Liquidator may apply to the Tribunal, and the Tribunal may confirm, reverse or modify the act or decision complained of and make such further order as it thinks just and proper in the circumstances. MEETINGS OF CREDITORS AND CONTRIBUTORIES 44. Application of rules to meetings.- Subject to any directions given by the Tribunal, rules as hereinafter set out shall apply to meetings of creditors and contributories as may be convened in pursuance of subsection (3) of section 287 and sub-section (3) of section 292. 45. Notice of meeting.- (1) The CL shall summon meetings of creditors and contributories by giving not less than 14 days' notice by sending individually respective creditor or contributory by registered post or speed post or by electronic means so as to reach such person not less than 14 days before the datefixed for the meeting: Provided that where the number of creditors or contributories, as the case may be, exceeds 500, the CL shall also give a 14 days' notice by advertisement in one daily newspaper in the English language and one daily newspaper in the principal regional language circulating in the State. Liquidator (2) The notice to each creditor or contributory shall be sent to their respective addresses given in proof / Statement of Affairs / books of the Company / other address as may be known to the person summoning the meeting, as may be applicable. their wishes; and (3) The notices shall be in Forms WIN 25 to 29 as may be applicable. 46. Place and time of meeting.- Every meeting shall be held at such place and time as the CL considers convenient for the majority of the creditors or contributories, as the case may be. 47. Notice of first or other meeting to officers of company.- (1) The CL shall also give, to each of the officers of the company, who in his opinion ought to attend the first or any other meeting of creditors or contributories, 14 days' notice in Form WIN 30 and it shall be the duty of every such officer to attend, if so required by the CL, and if any such officer fails to attend, the Liquidator may report such failure to the Tribunal for necessary directions. (2) The CL, if he thinks fit, may instead of requiring any of the officers of the company to attend the meeting, require such officer to answer any interrogatories or to furnish in writing any information that he may require for purposes of such meeting, and if such officer fails to answer the interrogatories or furnish such information, the liquidator shall report such failure to the Tribunal for directions.

Exercise and Control of Company Liquidator's Powers. Contd . 48. Proof of notice.- An affidavit by any person who sent the notice, that such notice has been duly sent, shall be sufficient evidence of the notice having been sent to the person to whom the same was addressed and the affidavit shall be filed in the Tribunal in Form WIN 31. 49. Costs of meeting.- The cost of convening and conducting the meeting of the creditors or contributories shall be met out of the assets of the company. 50. Chairman of meeting.- The CL or some person nominated by him shall be the Chairman of the meeting and the nomination shall be in Form WIN 32. 51. Resolution at creditors' meeting.- At a meeting of creditors, a resolution shall be deemed to be passed, when a majority in value of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution and in a winding up by the Tribunal, the value of a creditor, shall, for the purposes of a first meeting of the creditors held under section 287, be deemed to be the value as shown in the books of the company, or the amount mentioned in his proof as referred to rule 101, whichever is less and for the purposes of any other meeting, the value for which the creditor has proved his debt or claim. 52. Resolution of contributories' meeting.- At a meeting of the contributories, a resolution shall be deemed to be passed when a majority in value of the contributories present personally or by proxy and voting on the resolution have voted in favour of the resolution and the value of the contributories shall be determined according to the number of votes to which each contributory is entitled as a member of the company under the provisions of the Act, or the articles of the company, as the case may be. 53. Copies of resolution to be filed.- The CL shall file in the Tribunal a copy certified by him of every resolution passed at a meeting of the creditors or contributories and the Registry shall keep in each case a file of such resolution.

Exercise and Control of Company Liquidator's Powers. Contd . 54. Non-receipt of notice by creditor or contributory.- Where a meeting of creditors or contributories is summoned by notice, the proceedings and resolution at the meeting shall, unless the Tribunal otherwise orders, be valid notwithstanding that some creditors or contributories may not have received the notice sent to them. 55. Adjournments.- The chairman of the meeting may, with the consent of the creditors or contributories present in the meeting, as the case may be , adjourn it from time to time, but the adjourned meeting shall be held at the same place as the original meeting unless in the resolution for adjournment another place is specified or unless the Tribunal otherwiseorders. 56. Quorum.- A meeting may not act for any purpose except for adjournment thereof unless there are present or represented thereat in the case of a creditors' meeting at least three creditors / Contributories entitled to vote or all the Creditors / contributories if the number does not exceed three. 57. Procedure in absence of quorum.- If, within half an hour from the time appointed for the meeting, a quorum is not present or represented, the meeting shall be adjourned to the same day in the following week at the same time and place and if at such adjourned meeting, the quorum is not present, at least two creditors or contributories present in person shall form the quorum and may transact the business for which the meeting was convened: Provided that if at the adjourned meeting also Quorum not present, the chairman to submit his report to the Tribunal for directions. 58. When creditor can vote.- In the case of a first meeting of creditors, a person shall not be entitled to vote unless he has duly lodged with the CL, a proof of the debt which he claims to be due to him and in the case of other meeting of creditors, a person shall not be entitled to vote unless he has lodged with the CL a proof of the debt and such proof has been admitted wholly or in part. Provided that this rule and rules 59 to 62 shall not apply to a meeting of creditors held prior to the meeting of creditors under section 287: Provided further that this rule shall not apply to any creditors or class of creditors who by virtue of these rules or any directions given thereunder are not required to prove their debts

Exercise and Control of Company Liquidator's Powers. Contd . 59. Case in which creditors may not vote.- A creditor shall not vote in respect of any unliquidated or contingent debt or any debt, value of which is not ascertained, nor shall a creditor vote in respect of any debt secured by a current bill of exchange or promissory note held by him unless he is willing to treat liability to him thereon of every person who is liable thereon antecedently to the company, and against whom no order of adjudication has been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for purposes of dividend, to deduct it from his proof mentioned above. 60. When secured creditor can vote.- For the purposes of voting at a meeting, in a winding up by the Tribunal, a secured creditor shall, unless he surrenders his security, state in his aforesaid proof, the particulars of his security, the date when it was given and the value at which it is assessed by a registered valuer, and shall be entitled to vote only in respect of the balance due to him, if any, after deducting the value of his security. 61. Effect of voting by a secured creditor.- If a secured creditor votes in respect of his whole debt he shall be deemed to have surrendered his security, unless the Tribunal, on an application by such creditor, is satisfied that the omission to value the security was due to inadvertence. 62. Procedure when secured creditor votes without surrendering security. - The liquidator may within 15 days from the date of the meeting at which a secured creditor voted on the basis of his valuation of the security, require him to give up the security for the benefit of the creditors generally on payment of the value so estimated by him, and may, if necessary, apply to the Tribunal for an order to compel such creditor to give up the security: Provided that the Tribunal may, for good cause shown, permit the said creditor to correct his valuation before being required to give up the security, upon such terms as to costs as the Tribunal may consider just. 63. Admission or rejection of proof for purposes of voting. - The chairman of the meeting shall have power to admit or reject a proof for the purposes of voting, but his decision shall be subject to appeal to the Tribunal, and if he is in doubt whether a proof shall be admitted or rejected, he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the objection being sustained

Exercise and Control of Company Liquidator's Powers. Contd . 64. Minutes of proceedings.- (1) The chairman of the meeting shall cause minutes of the proceedings at the meeting to be drawn up and fairly entered in the Minute Book within 30 days and the minutes shall be signed by him or by the chairman of the next meeting. (2) A list of creditors and contributories present at every meeting shall be made and kept in Form WIN 33. 65. Report to Tribunal.- The CL shall, within 7 days of the conclusion of the meeting, report the result thereof to the Tribunal in Form No. WIN 34. 66. Voting by proxies.- A creditor / contributory may vote either in person or by proxy, and where a person is authorised in the manner provided by section 113 to represent a body corporate at any meeting, such person shall produce to the CL / chairman, a copy of the resolution so authorising him and such copy must be certified true copy by a director, manager, secretary or other officer of the company duly authorised in that behalf, who shall certify that he is so authorised. 67. Form of proxies.- A creditor or contributory may give a general proxy or a special proxy to any person, and a general proxy shall be in Form WIN 35 and a special proxy in Form WIN 36 68. Proxies to CL or chairman of meeting.- A creditor or contributory in a winding up by the Tribunal may appoint the CL or if there is no such liquidator, the chairman of the meeting, to act as his general or special proxy. 69. Use of proxies by deputy.- Where a CL who holds any proxies cannot attend the meeting for which they are given, he may in writing depute some person under his official control to use the proxies on his behalf and in such manner as he may direct.

Exercise and Control of Company Liquidator's Powers. Contd . 70. Forms to be sent with notice.- Forms of proxies shall be sent to the creditors and contributories with the notice summoning the meeting and no name shall be inserted or printed in the form before it is sent. 71. Proxies to be lodged.- A proxy shall be lodged not later than 48 hours before the meeting at which it is to be used, with the CL in a winding up by the Tribunal. 72. Holder of proxy not to vote on matter in which he is financially interested.- No person acting either under a general or special proxy, shall vote in favour of any resolution which would directly or indirectly place himself, his partner or employer in a position to receive any remuneration out of the assets of the company otherwise than as a creditor ratably with the other creditors of the company. 73. Minor not to be appointed proxy.- No person shall be appointed as a general or special proxy who is a minor. 74. Filling in proxy where creditor or contributory is blind or incapable. The proxy of a creditor or a contributory who is blind or incapable of writing may be accepted if such creditor or contributory has attached his signature or mark thereto in the presence of a witness who shall add to his signature his description and address: Provided that all insertions in the proxy shall be in the handwriting of the witness and such witness shall have certified at the foot of the proxy that all such insertions have been made by him at the request and in the presence of the creditor or contributory before he attached his signature or mark. 75. Proxy of person not acquainted with English. - The proxy of a creditor or contributory who does not know English may be accepted if it is executed in the manner provided in rule 74 and the witness certifies that it was explained to the creditor or contributory in the language known to him, and gives the creditor's or contributory's name in English below the signature.

Books to be Kept by Company Liquidator. REGISTERS AND BOOKS OF ACCOUNT TO BE MAINTAINED BY CL 293. (1)The Company Liquidator shall keep proper books in such manner, as may be prescribed, in which he shall cause entries or minutes to be made of proceedings at meetings and of such other matters as may be prescribed. 79. Record book to be maintained by CL.- The CL shall maintain a record book for each company in which shall be entered minutes of all the proceedings and resolutions passed at any meeting of the creditors or contributories or of the AC, the substance of all orders passed by the Tribunal in the liquidation proceedings, and all such matters other than matters of account as may be necessary, to furnish a correct view of the administration of the company's affairs. (2) Any creditor or contributory may, subject to the control of the Tribunal, inspect any such books, personally or through his agent. 80. Registers and books to be maintained by CL.- (1) The CL shall maintain the following books of accounts, so far as may be applicable, in respect of the company under winding up: (a). Register of Liquidations in Form WIN 38 A; To . (s). Books Register in Form WIN 38 S; (t). Register of unclaimed dividends and undistributed assets, deposited into the companies liquidation account in the Bank, in Form WIN 38T, and in maintaining the registers and books mentioned above, the CL shall follow the instructions contained in the respective forms provided for the said books and registers, (2) The CL shall, in addition to the registers and books referred to in sub-rule (1), maintain such other books as may be necessary for the proper and efficient working of his office such as petty cash register, correspondence register, despatch register, daily register of money orders and cheques received for accounting of transactions entered into by him in relation to the company. (3) Where the accounts of the company are incomplete, the CL shall, with all convenient speed, as soon as the order for winding up is made, have them completed and brought up- to-date. (4) (a) Where the CL is authorised to carry on the business of the company he shall keep separate books of account in respect of such business and such books shall, as far as possible, be in conformity with the books already kept by the company in the course of its business, and the CL shall incorporate in the winding up cash book and in the company's cash book, the total weekly amountsof the receipts and payments on such trading account. (b) The trading account shall, from time to time not less than once in every month, be verified by affidavit, and the CL shall thereupon submit such account to the AC (if any) or such member thereof as may be appointed by the said committee for that purpose, who shall examine and certify the same. (5) The CL shall keep proper vouchers for all payments made or expenses incurred by him, and the vouchers shall be serially numbered.

Audit of Company Liquidator's Accounts. 294. (1)The Company Liquidator shall maintain proper and regular books of account including accounts of receipts and payments made by him in such form and manner as may be prescribed. (2)The Company Liquidator shall, at such times as may be prescribed but not less than twice in each year during his tenure of office, present to the Tribunal an account of the receipts and payments as such liquidator in the prescribed form in duplicate, which shall be verified by a declaration in such form and manner as may be prescribed. (3) The Tribunal shall cause the accounts to be audited in such manner as it thinks fit, and for the purpose of the audit, the Company Liquidator shall furnish to the Tribunal with such vouchers and information as the Tribunal may require, and the Tribunal may, at any time, require the production of, and inspect, any books of account kept by the Company Liquidator. (4) When the accounts of the company have been audited, one copy thereof shall be filed by the Company Liquidator with the Tribunal, and the other copy shall be delivered to the Registrar which shall be open to inspection by any creditor, contributory or person interested. (5)Where an account referred to in sub-section (4) relates to a Government company, the Company Liquidator shall forward a copy thereof FILING AND AUDIT OF CL'S ACCOUNT 91. Half-yearly accounts to be filed.- For the purposes of sub-section (2) of section 294, unless otherwise ordered by the Tribunal, the CL shall file his accounts to Tribunal twice a year and such accounts shall be made up to the 31st of March and 30th of September every year, the account for the period ending 31 st March being filed not later than 30th of June following, and account for the period ending 30th September, not later than 31st of December following: Provided that the final accounts of the CL shall be filed as soon as the affairs of the company have been fully wound up, irrespective of the period specified above: Provided further that the Tribunal may permit the CL to straight away forward completed accounts of the company in liquidation in respect of relevant period to the auditor for the purpose of audit in Form WIN 42 requesting that the accounts may be audited, and the certificate of audit shall be submitted to the Tribunal not later than 1 month from the date of receipt of the copy of the accounts as required under subsection (3) of section 294: Provided also that the accounts need not be got audited where the transaction during the period is for Rs. 10,000/- or less. 92. Form of account.- The account shall be a statement of receipts and payments in Form WIN 39 and shall be prepared in accordance with the instructions contained in the said form and three copies thereof shall be filed, and the account shall be verified by an affidavit of the CL in Form WIN 40 and the final account shall be in Form WIN 41. (a) to the Central Government, if that Government is a member of the Government company; or 93. Nil account.- (b) to any State Government, if that Government is a member of the Government company; or Where the CL has not, during the period of account, received or paid any sum of money on account of the assets of the company, he shall file an affidavit of no receipts or payments on the date on which he shall have to file his accounts for the period. (c) to the Central Government and any State Government, if both the Governments are members of the Government company. 94. Registry to send copy of account to auditor.- (6) The Company Liquidator shall cause the accounts when audited, or a summary thereof, to be printed, and shall send a printed copy of the accounts or summary thereof by post to every creditor and every contributory: As soon as the accounts are filed, the Registry shall forward to the auditor one copy thereof for purposes of audit with a requisition in Form WIN 42 requesting that the accounts may be audited and a certificate of audit be submitted to the Tribunal not later than 1 month from the date of receipt of the copy of the account as required under sub-section (3) of section 294: Provided that the Tribunal may dispense with the compliance of the provisions of this sub-section in any case it thinks fit. Provided that the accounts need not be got audited where the total transaction during the period is for Rs. 10,000/- or less.

Audit of Company Liquidator's Accounts. Contd . FILING AND AUDIT OF CL'S ACCOUNT 95. Audit of CL's accounts.- The accounts shall be preferably audited by one or more Chartered Accountants appointed by the Tribunal from out of the panel to be maintained by the Tribunal, the audit shall be a complete check of the accounts of the CL and the CL shall produce before the auditor all his books and vouchers for the purposes of the audit, and shall give the auditor all such explanations, information and assistance as may be required of him in respect of the accounts. 96. Audit certificate to be filed.- After the audit of the accounts of the CL filed in Tribunal, the auditor shall forward to the Registry a certificate of audit relating to the account with his observations and comments, if any, on the account, together with a copy thereof and shall forward another copy to the CL, and the CL shall file copy of the audit certificate together with a copy of audited accounts with the Registrar of Companies and the Registry shall file the original audit certificate with the records of the Tribunal. 97. Audit fees.- The audit fees shall be fixed by the Tribunal from time to time having regard to -the nature and complexity of the case. 98. Inspection of account and certificate of audit.- Any creditor or contributory shall be entitled to inspect the accounts and the auditor's certificate in the office of the Tribunal on payment of fees of Rs. 100/- and to obtain a copy thereof on payment of the charges at the rate of Rs. 5/- per page. 99. Account and auditor's report to be placed before Tribunal.- Upon the audit of the account, the Registry shall place the statement of account and the auditor's certificate before the Tribunal for its consideration and orders.

Payment of Debts by Contributory and Extent of Set-off. 295. (1) The Tribunal may, at any time after passing of a winding up order, pass an order requiring any contributory for the time being on the list of contributories to pay, in the manner directed by the order, any money due to the company, from him or from the estate of the person whom he represents, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act. (2)The Tribunal, in making an order, under sub-section (1), may, (a) in the case of an unlimited company, allow to the contributory, by way of setoff, any money due to him or to the estate which he represents, from the company, on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit; and (b) in the case of a limited company, allow to any director or manager whose liability is unlimited, or to his estate, such set-off. (3) In the case of any company, whether limited or unlimited, when all the creditors have been paid in full, any money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

Power of Tribunal to Make Calls. CALLS IN WINDING UP BY TRIBUNAL 296. The Tribunal may, at any time after the passing of a winding up order, and either before or after it has ascertained the sufficiency of the assets of the company, 131. Calls by CL.- Subject to the provisions of subsections (2) of section 465, the Tribunal may by order grant leave to the CL to make calls referred to in section 296. 132. CL to realise uncalled capital.- (a) make calls on all or any of the contributories for the time being on the list of the contributories, to the extent of their liability, for payment of any money which the Tribunal considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves; and Notwithstanding any charge or encumbrance on the uncalled capital of the company, the CL shall be entitled to call and realise the uncalled capital of the company and to collect the arrears, if any, due on calls made prior to the winding up, but shall hold all moneys so realised subject to the rights, if any, of the holder of any such charge or encumbrance. (b) make an order for payment of any calls so made. 133. Application for leave to make call.- (1) The CL shall not make any call without obtaining the leave of the Tribunal for the purpose. (2) Within 7 days of the settlement of the list of contributories, the CL may apply to the Tribunal for leave to make a call on the contributories and the application shall state the proposed amount of such call and shall be in Form WIN 52 which shall be supported by the affidavit of the CL which shall be in Form WIN 53. 134. Notice of application.- (1) Notice of an application for leave to make a call shall be served on every contributory proposed to be included in such call, by post under certificate of posting so as to reach such contributory, in the ordinary course of post not less than 7 clear days before the date appointed for the hearing thereof, or if the Tribunal so directs, notice of the application may be given by advertisement in Form WIN 54 , in newspapers as the Tribunal may direct, not less than 7 clear days before the date appointed for the hearing, without a separate notice to each contributory. (2) The affidavit of service relating to the dispatch of notice to each contributory, or to the advertisement, as the case may be, shall be filed in the Tribunal three days before the date fixed for the hearing.

Power of Tribunal to Make Calls. Contd.. 135. Order granting leave to make call and document making call. The order granting leave to make a call shall be in Form WIN 55, and shall contain directions as to the time within which such calls shall be paid and when an order has been made granting leave to make a call, the CL shall file in Tribunal, document making the call in Form WIN 56 with such variations as circumstances may require. 136. Service of notice of call- Immediately after filing the document making the call as referred to in rule 135, the CL shall serve by registered post or speed post or in electronic mode, a copy of the order granting leave to make the call upon each of the contributories included in such call together with a notice in Form WIN 57 specifying the amount or balance due from such contributory in respect of such call and the order granting leave to make a call need not be advertised unless the Tribunal otherwise orders for any special reason. 137. Order for payment of call.- The CL may apply to the Tribunal for an order against any contributory or contributories for payment of moneys due on the calls made by him and the application shall be made in Form WIN 58 supported by an affidavit in Form WIN 59 and notice of the application together with a copy of the affidavit shall be served on the contributory by registered post or speed post not less than 7 days before the date fixed for the hearing of the application, and the order for payment shall be in Form WIN 60. 138. Other moneys due by contributories.- When any money is due to the company from a contributory or from the estate of the person whom he represents, other than moneys due on calls made subsequent to the winding up but including moneys due on calls made prior to the winding up the CL may make an application to the Tribunal supported by an affidavit for an order against such contributory for the payment of such moneys and the notice of the application shall be given to such contributory by registered post or speed post not less than 7 days prior to the date fixed for the hearing of the application.

Companies (Winding Up) Rules, 2020: An Overview

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